Electronic Currency

Normally, cash is known as a mean of exchange and of storing value in various forms. Nowadays, internet becomes more important for the people in the world. As a result of recent proliferation of computers, telecommunication links and modern method of rendering payment are receiving a great deal of attention form people. The example of the modern method of rendering payment is electronic currency.

Electronic currency can known as electronic money, digital cash, digital money and etc. It typically means that currency with real value and which can be exchanged for traditional cash which is in the forms of coins and notes, is instead entirely virtually. It refers to money which is exchanged only electronically. Besides, electronic currency is designed to facilitate electronic commerce transaction. It only exists in the form of digital format and can be primarily based on the internet. Normally, electronic currency involves the use of computer networks, internet and digital stored value.

There are two types of electronic currency:
( 1 ) Identified e-money
This type of electronic currency contains the information revealing the identity of the people who originally withdrew the money from the bank. Besides, identified e-money enables the bank to track the money as it moves through the economy.

( 2 ) Anonymous e-money
The function of anonymous e-money is like the real paper cash. When anonymous e-money withdrawn from an account, it can be spent or given away without leaving a transaction trail. It can’t be traced as it moves around the economy and the owner of the cash can not be identified.

There are two further varieties of each type of e-money:
( 1) Online e-money
Online e-money requires a third party such as a bank or clearing house when carrying out the transaction. This is similar to credit-card clearing mechanisms at the point-of-sales in supermarkets.

( 2 ) Offline e-money
Offline e-money does not require a third party during the conduct of a transaction, analogous to exchange of cash for goods. It is the most complex form of e-money and true digital cash takes the form of offline anonymous e-money, especially when it comes to solve the double-spending problem.

Examples of electronic currency:
( a ) PayPal
PayPal is an online payments and money transfer service that allows people to send money via e-mail, phone and etc. A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The receipt of a PayPal transfer can either request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account.

( b ) Chipknip
Chipknip is the electronic cash system that used in the Netherlands. It is an electronic pursues which allows us to pay via bank or credit card as a sort of loadable wallet in-a-chip. Chipknip differs from other electronic payment system. It is because people have to change it with money before people use it to conduct a transaction.

The application of pre-paid cash cards for consumers

What is pre-paid cash cards for consumers?

Pre-paid cash card also known as “stored value” card. It looks like a credit card and debit card and they offer the same function to purchase products and services but with an important difference – you only can spend the balance that you have been preloaded into the pre-paid cash card. As a result, you will not have the risk of running into debt as the pre-paid cash card has no credit to spend.

There are three application of pre-paid cash card:
(1) Closed system prepaid cards

Closed system prepaid cards also known as merchant gift cards. It have emerged and replaced the traditional gift certificate. “Closed system” mean the cards only can use at a single merchant, that means closed system prepaid cards can be used only at the retailers that issue them. For example, the consumers only can use the cards at the particular merchant that issue the cards at the fixed amount of the card. There is a variation on the closed system card, which called semi-closed system card.

(2) Open system prepaid card
Open system prepaid card is a multipurpose prepaid card that can be used at any merchant that accept a card that operates on a particular payment system or network such as an association network and etc. So, it also known as network branded prepaid card. Open system prepaid card has wide range of function than closed system prepaid card. The common example of this kid of prepaid card is aka Network-Branded Prepaid Card.

(3) Prepaid Card Advance
It is a technological advance that enables the cardholder to manage their prepaid card account by using their mobile phone. As a result, it may enable the cardholder to initially load the card, fill-up their account, obtain a balance, transmit funds to secondary cardholder and temporarily block a card easily.

Mobile Payment System in Malaysia: Its Potentials and Consumers’ Adoption Strategies

Mobile Payment System in Malaysia
There are 4 billion mobile phones in worldwide but only 2 billion bank accounts. This is very raison for the new mobile payment system. It is a system using mobile devices to make transactions such as pay bills, perform banking transactions and etc. In order to enjoy the benefits of mobile payment, users have to register and activate an account with mobile payment service providers.


Cash payment in Malaysia still considers as a large portion of the number of transactions in the economy. Cash payment is expected to level off soon and stabilize with the increased use of electronic payments. It is because electronic payment can increase the speed of payment, convenient, and reduce costs. Mobile phone payment is identified as one of the delivery channels that should be leverage on. Bank Negara Malaysia sees mobile payment system has a tremendous potential in Malaysia considering that 88% of the Malaysian population are subscribing to mobile phone service. The high penetration rate affirms mobile phone network as an increasing common channel for Malaysia to perform activities such as make payments. Indeed, payment via text message has significant potential also. With 25 million mobile phone subscribers in Malaysia, there has potential to accelerate the migration to mobile payment.

Introduce new system to across an organization is not an easy task. After few years trial and error, many industries in Malaysia are really to go with mobile payment system. Maxis FastTap is an integrated mobile payment service that uses near field communication (NFC) technology. With this service, user who sign up for FastTop is available now to use the classic phone to purchase goods and services Visa payWave merchant locations as well as pay for toll, parking, theme park charge and etc and Touch n Go points nationwide.

Nowadays, Malaysian users can continue to enjoy the benefits of speed and convenient on their mobile phones. This innovation of electronic payment in Malaysia bodes well for the mobile payment innovation in future.

Credit Card Debts: Causes and Prevention

Credit Card Debts

Payment card covers a range of different cards that can be presented by cardholder to make payment. The payment card can be classified into types depend on how the account is managed. Different types of payment card include debit card, credit card and charge card. Among all the types, credit card is most popular. It is because cardholders can make purchases at merchants that accepting credit card without any cash payment. Credit card debts accessed through credit cards. Debts result when a cardholder make purchases either items or services through credit card system. Credit card debts will accumulates via interest and penalties when cardholder does not pay back the money of payment.

Causes

Nowadays, credit card debts have become flourish problem especially in campuses. One of the most common causes is excessive spending. Cardholder did use the credit card a lot and will soon apply another credit card. Normally, cardholder will just kept more offers and move the credit around from card to card.

Cardholder always has little or no saving. This is one of the major mistakes that easily cause the credit card debts. Cardholder will uses credit card to cover any unpredictable or emergency expanses.

Most of the credit cardholder falls into debts is only partially understood or lack of financial knowledge about credit card system. He/she has no idea about the debts and charges he/she is going to pay.

Poor money management includes monthly budgeting of credit card’s bill payment. This is one of the most general mistakes that easiest to make. For instance, cardholder will be charged high interest due to late payment of debts.

With the ease use of credit card, relying on it to meet monthly purchases and expenses become very common. Credit card looked as extra income. It absolutely will lead the cardholder down slippery road into debts.

Some of the cardholders may be more comfortable with debts. This cause is related to one’s debt attitude. Cardholder believes that their future earnings able to paid off the accumulated debts. He/she willing to tolerate debts, so that he/she can keep maintains their comfortable lifestyle.

In this time of financial crisis, many people become unemployed each day. He/she will reach for credit card to cover the daily expenses if he/she is having difficulties securing a new job.

Prevention

Prudent spending and being a responsible credit cardholder is the best against credit card debts. Cardholder should spend within the means, and if do make purchases by credit card, he/she should settle the payment as soon as possible. Never make a late payment to anyone.

Credit card debts are a problem for a significant number of students. Many of them lack the knowledge of how to handle the debts. Education is the key. Education must go beyond providing information. The earlier they learn how to manage finances, the less likely they will fall into debts problem.

Creating a new budget is an effective and efficient way to under control the spending. With the budget statement, he/she will be able to clearly know the exactly spending. He/she will able to cut out unnecessary expenses. Setting up budget is not easy. So, he/she can obtain free consultation services in some organizations. The key is always avoided extra expenses and purchases.

Credit card, when used properly, is convenient and an excellent budgeting tool. If abused, it will become the starting point of nightmare and stress. Remember that always ask yourself what you want the credit card for.