Electronic Currency

Electronic currency, which also known as e-money or digital currency, is the money that holders use to buy goods and services that the vast internet offers. It involves the use of computer networks, internet and digital stored value systems. In general, e-currency can be classified as indentified e-money and anonymous e-money. Identified e-money contains information revealing the identity of the person who originally withdrew the money from the bank. However, anonymous e-money that withdrawn from an account can be spent or given away without leaving a transaction tray.

Now, let’s have a look at one of the E-micropayment system. In 1990, Professor David Chaum formed a Dutch firm called DigiCash. With its patented advances in public key cryptography, it has pioneered development of electronic payment mechanisms for open, closed and network systems that provide security and privacy. At the moment, DigiCash provided a new concept in payment system, combined the computerized convenience with security and privacy that improve on paper cash. It offered a variety of products, including Blue, CAFÉ, DyniCash, ECash and Facility Card. Throughout the history, DigiCash has developed leading edge products and partnered with many companies to provide advanced payment system technology to the market.

However, DigiCash which did not have a clear marketing strategy was unable to survive for long. With failure in cooperation with a few banks and domination of credit card in electronic payments market, DigiCash was filed for bankruptcy in 1998. (How DigiCash blew everything)

The story of DigiCash has not ended yet. In September 2005, a team of software industry veterans and members of elite technology units of the Israeli Army founded DigiCash again. Based on patent-pending technology, it aims to provide a digital implementation of online offers and digital currency empowering business to convey tangible and persistent incentives to customers instantly and in online context.

Here are some other example of e-micropayment system:

Closed down operation:

Still in operation:

More information is available at http://www.geercom.com/emicropayments.html

As credit card is very common and popular nowadays, E-currency operators should differentiate themselves with it and let customers know what makes them better than credit card. In other words, they have to create more competitive advantages over credit card in order to compete with it.