Electronic money

Electronic money is quickly becoming mainstream for many households. Electronic money takes several forms. It can range from using a debit card at Dillions to using electronic cash on the Internet. Many people use electronic cash and feel there are relative benefits, there are also people who find disadvantages to using electronic cash. Just like with anything, there are pros and cons to electronic cash

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DEBIT AND ATM CARDS

One form of electronic cash is debit cards. Debit cards are plastic cards electronically connected to a checking account. Debit cards can serve as checks and as ATM cards.

When using a debit card as a check, the card is simply given to the clerk and it is then treated as a credit card. Debit cards can only be used at stores which accept credit cards. If there is not enough money in the account the card is linked to, the transaction will not be approved. This provides added security for the merchant over accepting a check. If the consumer chooses to use a debit card they will avoid the hassles of having to provide identification as when issuing a check. Coastal Mart allows customers to pay for their purchase at the pump by using a debit card or credit card. I myself have and regularly use a debit card. I feel Coastal Mart gains customers because of its convenience. I buy gas there and find this method of paying very convenient, especially if I am in a hurry. I also think debit cards are very convenient elsewhere as well as less expensive than writing checks for everything. Generally I only write checks for monthly bills. With the rise in technology I could opt for most of my monthly bills to be paid for through electronic transfer also. I am not sure why I have not chosen to reduce my check writing further, other than I am still a little leery of someone having access to my bank account.

When using the debit card at an ATM machine, money is attainable from a checking or savings account. It is also possible to transfer money between accounts, make payments, and check balances. I personally use the ATM machine more than the actual bank.

I found through reading an article in the magazine Money, that I am not among the minority of using the debit card. It is estimated that people in 22 million households use a debit card regularly. Experts also predict that 40% of households will shop with a debit card by the year 2000. 23% of people today shop with a debit card. I find this to be a very good thing due to the high expense of the check clearing system. Costs will not only decline for individuals, but hopefully for everyone.

It should be noted that although debit cards may be convenient and fast, they are not as safe as credit cards. To illustrate, if a credit card is lost or stolen federal law limits liability to $50 in unauthorized charges. On the other hand, if a debit card is lost or stolen and not reported within two days of discovering it the card holder could be responsible for up to $500. If the cardholder fails to report it within 60 days, they could take the entire loss. I was unaware of these stipulations prior to reading "What to Know Before you Spend Cyberdough". The author, Ellen Stark, advises to guard the debit card as closely as actual cash or checks would be guarded.

STORED VALUE CARDS

Stored value cards are another form of electronic cash. These cards have money in the form of credit stored electronically. Ellen Stark provided information that these cards either use a magnetic strip or a computer chip. My first encounter with such cards was here at WSU. I also found out that these cards are sold by public transit systems in New York City, San Francisco and other cities. The cards are then used by users of the transit system to pay for the fare. On campus the Shocker Card can be used for vending machines, laundry machines, dining services, and copy machines. The Shocker Card is also a debit card, ATM card and calling card. This is made possible by using different magnetic strips for each function.

Stored valued cards can be very beneficial to many people. I do not use my card as a stored value card, but if I lived on campus I am sure that I would. Although such cards may be more convenient than carrying around coin and cash, they are not any more secure than cash. Ellen Stark advises to never forget that stored-value cards are the equivalent of cash and if the card is lost or stolen the issuer is probably not obliged to refund the money.

ELECTRONIC MONEY ON THE INTERNET

Digital cash is the newest form of electronic cash. It is designed to allow Internet users to shop on the net without using a credit card. There are many concerns with this new technology. Several companies have developed software systems that allow shopping on the net. They each claim benefits unique to their own systems. I have chosen to discuss CyberCash's service that allows Internet shopping. The Internet has become so much more than a place to go for information. It is now possible to actually shop through your computer. How convenient this, no more long lines and crowds of people. That is a definite plus for me. I had a lot of questions prior to my research, but luckily I found many answers and decided to discuss them in my paper.

CYBERCASH AND IT'S CYBERCOIN SERVICE

CyberCash created the CyberCoin service which allows a consumer to use an existing bank account to transfer money to an electronic wallet. The wallet is a graphical software program installed on a personal computer. The wallet supports multiple credit cards including Visa, MasterCard, American Express and Discover. A log is part of the wallet which records all activities. CyberCash offers their services totally free to consumers.

Obtaining a Wallet is quite simple. Currently a Wallet can be downloaded from the CyberCash web site at http://www.cybercash.com. I found that consumers will soon be able to download a branded bank Wallet from participating bank and merchant sites, which will make it even more convenient for consumers. Money can be transferred ...

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