Electronic Currency

Electronic currency (also known as e-money, electronic cash, digital cash or digital currency) is the digital form of paper currency. E-cash makes monetary transactions easy especially for transferring huge amounts or from another location. It enables more secure and anonymous purchase of items. Electronic Funds Transfer (EFT) is an example.

There are some advantages of using electronic currency. In this high-tech era, online banking, debit cards, online bill payments and internet business are reducing the need for paper money. Now, most of the banks offer services like funds transfer, stock purchase, e-banking and other services. These services provide convenience to customers in their transactions because it does not involve any physical cash or checques. Customers do not need to waste their time waiting in lines. Besides that, debit cards and online bill payments allow users to transfer funds from personal accounts to business accounts without any actual transfer of paper money.

E-cash is good for micropayments, which are small payments that are not significant enough to warrant the use of credit cards. It can be done anonymously. Stored-value cards like Visa Cash can be used to make purchases online (on the Internet) or offline (in the physical world). Online involves interaction with bank to deal with third parties while offline means conducting a transaction without involving a bank.

Person-to-person payments like transferring funds between individuals are also one of the common e-payment schemes. It is fast and easy. Automated Teller Machines (ATM) seem obsolete with the use of e-cash. For more information on what is e-cash.

Although there are many benefits to digital cash, there are also its limitations. Fraud over digital cash has become a main issue in recent years. There is the risk of privacy invasion and hacking of bank records associated with electronic money. Factors that may hinder the use of the technology involved in digital cash include power failures, loss of records and unreliable softwares.

References:

http://projects.exeter.ac.uk/RDavies/arian/emoneyfaq.html

http://www.businesspme.com/uk/articles/trade/90/Electronic-money---advantages-and-disadvantages.html

A Review on E-Tailing

This is a review on a post on e-tailing dated 18 June 2007 from My E-Commerce blog. It is about OpenTable.com, an innovative EC business model for restaurants. It allows customers to make online reservations anytime and anywhere, immediate cancellation, or leave messages to the restaurants.

The website allows you to narrow searches for restaurants to specific areas and types of cuisines.

You can then check the availability of seats on your requested date and time. It is convenient because it can be done outside business hours and customers do not have to purposely stop by the place to book a place. The system can also help the restaurants to familiarise with their customers’ preferences. At present, there are about 10,000 restaurants using OpenTable! Read more on OpenTable’s online reservation system.

As for Malaysia, a new site http://www.theqguides.com/ has started offering online reservations.

There are about 20 restaurants participating in it, mostly located around KL areas. Its function is similar to OpenTable. Customers can also earn points for each successful dine with a minimum value spent, almost like the Dining Rewards Program at OpenTable.

Overall, there are still not many restaurants with online reservation services. However, it is slowly starting up. Hopefully, Malaysians will start to see the benefits of such feature and encourage the list of restaurants joining in the system to grow in the future.

Credit Card Debts: Causes and Prevention

Do you know what is a Credit Card? A Credit Card is a method of payment that uses a small plastic card issued to consumers for making purchases. Credit cards may provide extra financial freedom but it will lead to a huge debt if consumers do not use credit card wisely.

Let’s look at some of the causes.

1. Poor Money Management
A monthly spending plan is essential, so that we know where our money is going. Sometimes, we may be spending hundreds of dollars unnecessarily each month and end up with extra charges on unneeded purchases. However, we will make more thoughtful decisions if there is good money management.

2. Expenses more than Income
Very often, we do not cut down monthly expenses in line with a decline in income for some reason and allow debt to fill the gap. Therefore consumers are compelled to use credit cards in buying stuff. The simplest way to avoid unwanted debt is to prepare for unexpected expenditures or emergencies by saving at least a recommended 4-6 months of living expenses.

3. Underemployment
People experiencing underemployment (getting less working hours at jobs) will be having lesser income. They may think of the situation as only for a short period but it is a false sense of relief. They should live a lifestyle that match their current income. Otherwise, debts will build up unknowingly.

4. Medical Expenses
The medical industry wants to get paid at the time service is rendered. The cost of obtaining cures and medicine is increasing if compared to previous year. Every doctor now accepts Credit Card because the doctor wants to get money instantly. We should think twice before using the Credit Card.

5. No money communication skills
Communication with family about the financial situation is important. Keep the lines of communication open and discuss financial goals and spending styles.

Here are some preventive measures.

1. Pay in full and on time
As consumers, we should always keep track of our credit card spending. Take self control and discipline to keep these cards in your wallet and not overspend on them. Make the payment as soon as possible to avoid paying interest charges to the bank, or at least try to make the minimum payment.

2. Avoid extra expenses
Prevention really is better than cure. One of the best habits is cut down on all unnecessary expenses. Wise judgments should be made before spending. There are some things we can actually avoid in buying.

3. Education
Financial courses important to educate people on how to plan their savings and spending. They are less likely to fall into credit card debts as an adult.

4. Limit the Plastics
Different credit cards have their own terms and conditions like interest rates and grace periods. Keep only one or two cards so that you can remember easily which one has the lowest and highest interest rates and not forget to pay on time.

Although credit cards bring convenience to people but it should be used with great care and caution and spend in accordance with own ability.

References:
http://www.3debtconsolidation.com/top10-causes.html

http://www.cardratings.com/howtoavoidcreditcarddebt.html

Application of Pre-paid Cash Card for Consumer

Pre-paid cash cards are like debit cards and very different from credit cards in that you can only use the card when there is balance in the card. In other words, you are using your ‘present’ money, unlike credit cards that use ‘future’ money. Therefore, there is no risk that you will spend over budget especially for girls who like to shop.

The main uses of pre-paid cash card:

Control - the purpose of pre-paid cash cards is for the users to be a master of their budget and spend accordingly with their budget.

No debt risk- you do not need to worry about debt risk like using a credit card because you are using money that you have preloaded so you won’t have the chance to spend more than what you have.

Convenience - instead of going around with huge amount of money in your wallet, it is much safer to just bring a prepaid card around. It is also a solution for those who are not able to apply for credit cards. Other than that, it is a very convenient tool for travellers because it can replace travelers checks. They can preload the card before going overseas with a set budget and avoid spending too much.

Actually, pre-paid cash card is very suitable for the young generation who like shopping and traveling because it can help control their budget and let them learn how to manage their money rather than letting the money manage them.