Electronic Currency

Nowadays, a lot of companies look forward to the electronic currency trading. Electronic currency is also known as e-money, electronic money, electronic cash, digital money, digital cash or digital currency. It means that the transaction between the company and the user is using the computer networks. There have a lot of success companies to implement the business by using this system, such as Hong Kong’s octopus card system, which started as a transit payment system and has grown into widely used electronic card system.

Electronic currency is far from the traditional ways of payment like banks, cheques, paper money and coins. E-currency allows users through internet or wireless devices to pay directly from their bank accounts by electronic such as micropayment, mobile payment (m-payment) or person-to-person (p2p) payments.

One of the examples of the e-currency is the PayPal. PayPal is the service allows anyone to pay in any way they prefer, including through credit cards, bank accounts, buyer credit or account balances, without sharing financial information. The background of the PayPal can refer to http://en.wikipedia.org/wiki/PayPal. The advantages and disadvantages of PayPal can refer to the http://www.merchant-account-service.com/paypal.html.

EBay is the one of the company opens up PayPal to developer. It is because PayPal allows buyers to pay instantly for eBay purchases. Buyer's like PayPal because they can quickly and easily pay for eBay purchases online. The more detail of the eBay using the PayPal, can refer to http://news.google.com/news?hl=en&q=paypal&um=1&ie=UTF-8&sa=X&oi=news_result&resnum=11&ct=title.

There have some advantage and disadvantage by using the electronic currency in our life. User can refer to this http://www.iit.edu/~peacjen/cs485/ecash2.htm to determine the safeguard by using the electronic currency.

Credit Card Debts: Causes & Preventions

CAUSES of CREDIT CARD DEBTS
The issue of credit-card debt among college students has received increasing attention recently because students often receive incentives, such as t-shirts or mugs, to apply for cards, and requirements, such as previous credit history, are often waived.

Colleges, too, have embraced the idea of credit cards among their students which caused students to fall to the credit cards trap. 77 percent of colleges reported accepting credit cards for payment of tuition. Further, many colleges allow companies to solicit students and alumni with imprint cards, cards personalized with the institution's logo. Credit card companies often are allowed to seek business on campus.

Other students may get into debt because of the assumption that they will easily get out of debt upon graduation from college. Graduate students, although concerned about their debt, viewed it as necessary for paying bills and staying in school. Unfortunately, this belief that debt will be quickly repaid can be misguided. Today's college students have grown up in a culture saturated with credit cards, but may view credit as something abstract or equivalent to earnings.

Another factor related to student credit card debt is one's attitude toward money. Teenagers experience "premature affluence" because of their high levels of discretionary income and almost no bills. Some teens may become used to a certain lifestyle and not know how to adjust when bills increase in college. Further, some students may be more comfortable with debt. Higher levels of debt in college students were related to greater tolerance of debt. Students may be willing to tolerate debt so that they can maintain the comfortable lifestyle to which they are accustomed.

PREVENTION of CREDIT CARD DEBTS
Clearly, consumer debt is a problem for a significant number of students. Many students lack the knowledge of how to handle credit and have attitudes that suggest that debt is acceptable. What then can be done?

First, education is the key. However, education must go beyond providing information. It is important to educate students about credit cards. Students need to know basic guidelines for eliminating and staying out of debt such as knowing credit card balances and interest rates, knowing that transferring high-interest rate balances to lower rate cards provides instant savings (if the high rate cards are immediately cut up), and that debit cards and checks allow students to only spend what they actually have.

Colleges should be encouraged to develop their own programs or modify existing high school programs to increase awareness and financial skills. A logical place for such a program would be in conjunction with new student orientation, although programming should be offered throughout the year and for all students.

Education and awareness alone may not be enough to reduce the problem of student credit card debt. Changing the process by which students obtain credit cards on campus is another important component. For example, a recommendation is that students not be allowed to receive free gifts for applying until after they have read a credit card educational brochure. This help to prevent any unnecessary credit card usage and unawareness of the high interest repayable if there’s default.

While colleges are in a position to teach credit card savvy to students, that task is not the sole responsibility of--nor should it begin with--the institution of higher education. Ideally, money management techniques would be first taught in the home with relevant programming implemented at the elementary and high school levels. The issue at hand is a societal problem, which requires a concerted effort by parents, educators, elected officials et al.

The Application of Pre-paid Cash Card for Consumers

“Prepaid card”, do the phrase sound familiar to all of you? For sure, it is believed that whoever holding mobile phone with them will know that phrase very well. But that prepaid card is not similar as the prepaid cash card that use to purchase of goods. As the prepaid cash cards have been introduced, they are taking the world of consumer spending by storm.

Today, there is a shown of rapid growth on using prepaid cards in certain payment part. In general, it is going to replace paper-based payment instrument. Basically, prepaid card is a card that allow buyer to transfer funds that are accessed electronically when goods and services are bought by recipients provided that there is a restriction on the types of merchants or products that can be bought. However, even if a payment part is ideal for prepaid products, adoption of them will depend on the ability of providers of these products to get all transactors on board. Besides that, prepaid card holders also allow to make electronic payment even though no relationship with financial institutions. Nevertheless, prepaid cards allow recipients to receive funds and spend them where the prepaid value is accepted. In some cases, the prepaid value can be converted to cash. Whether purchasers, recipients, and sellers of goods and services adopt a new payment choice is dependent on costs and benefits of prepaid products versus existing payment choices. However, it is believed that most of you know that cost of prepaid cards could also mean that consumers with nowhere else to go and whoever cannot afford it, are being forced to pay by using their own money since prepaid card providers are not making money.

Recently, consumers are more preferred on the existing payment mechanisms, such as cash, cheque and credit and debit cards, than prepaid card. Prepaid cards are prefunded; their value either resides on the card or at a remote database. At the beginning stage, prepaid cards were introduced to compete with small value cash transactions. At the same time, prepaid cards have been effective as a cash substitute in closed environments, such as university, campuses, coffee shop and so on, but prepaid cards have not been able to gain significant market penetration as a cash substitute. (Chakravorti, 2004; Van Hove, 2004a, 2005)

On the other hand, there have been quite a few applications of retailer specific prepaid cards that have been successful. Those specific prepaid card did provide benefits to both consumers and merchants. Those benefits to consumers include convenience, speed and possible rewards, such as discount on future purchases and those benefits to merchants include receiving cash in advance of the delivery of goods and services, increased loyalty, potentially faster payment processing at the point of sale and potentially lower payment processing costs. Yet, if the benefits are greater than the cost, the retailer may pay customers to purchase and use its prepaid card. Now the market for the prepaid card is till up and coming, certain prepaid applications are growing rapidly. There is a difficulty in collecting accurate usage and volume of prepaid payments caused by the diversity of issuers and applications and lack of an established uniform definition of a prepaid payment product. An analysis is conducted from year 1999 to 2005, the value of prepaid card purchases have been boosted. Moreover, the growth of prepaid applications has been faster than what has been expected on it.

Example of company that using prepaid card for consuming.

Starbucks Coffee Company (abstracted from article)
Starbucks Coffee Company, the worldwide chain of coffee houses, introduced a prepaid card in November2001, primarily to reduce the processing costs of previously issued paper gift certificates. Gift giving has been a critical factor to the success of the card. Around 60% to 80% of the activity on these cards results from users receiving the cards as gifts. As consumers migrate from cash payments to electronic alternatives, Starbucks has been able to lower some of its payment processing costs. Transaction costs are important to Starbucks because the company receives millions of payments monthly and most are valued at less than $5 each. Consumers use signature based debit cards or credit cards for up to 25 percent of their purchases (Chakravorti and Jankowski, 2005).While Starbucks’ cost of accepting cash payments is nearly one-third of accepting credit cards or signature based debit cards, the cost of its prepaid card is less than cash. Starbucks prepaid cards have enabled the coffee house chain to increase revenue by attracting new customers and enhancing the loyalty of existing customers. Unlike most consumers who discard their gift cards after their initial use, one out of three Starbucks card holders reloads value on the cards, suggesting these cards are more convenient for some Starbucks’ customers than other payment options. The company reports that electronic payments, including prepaid cards, provide some speed of service benefits. The coffee house chain is able to accept prepaid card payments faster than cash, thereby reducing customers’ wait times.

After an example, sure make you more understand on how the prepaid cards going to benefit both retailer and the card holder. Prepaid card initially introduced to avoid cash transactions and now continue to replace with cheques. Although prepaid cards are able to serve some key payment part, such as gift, employer initiated and government benefits programs, it is unlikely that they could significantly substitute for electronic account-based or credit-based payment products. Prepaid applications potentially provide a more cost-effective means to transfer funds by do not need to access through transactions accounts. The growth of prepaid cards is dependent on transactors’ benefits and their willingness to pay for the provision of services. Adoption of prepaid cards in niche markets may result in increased familiarity and confidence among payment system participants to spur even wider adoption of such products for other payment section.

"Prepaid cards are not for everyone," says Ken Howes. Therefore, there is not necessary to everyone to have prepaid card. "People have a choice about whether the benefits of having the card are worth the fees, and they are not forced upon people." But he says transparency and regulation are crucial to prevent "a competition in the prepaid arena".

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