Monday, September 23, 2002 Feature

E-cash to take care of empty wallet
Gunmala Suri

WHEN shopping in Singapore we pay Singapore dollars and in Europe we pay Euros. Get ready to pay in e-cash now. E-cash is relatively a recent entrant in the complex world of e-commerce. Very convenient and secure, it can be an alternative to traditional methods of online payments such as credit cards and even online transactions.

E-cash, digital cash or e-dollars, as it is known, was developed as a replacement for the traditional concept of money. It was also meant to have additional advantages that conventional money does not have.

"E-cash is nothing but block of data that represent money. It is payment message bearing a digital signature that function as a medium of exchange or value. This data can be from one point to another via networks and can be traded as tokens to be exchanged for the transferred real money."

Exchange for real money was a original concept with which e-cash was developed but now there are many e-cash providers who are trying to completely replace conventional paper money with e-cash. These entities intended to promote e-cash as a medium for obtaining products and services, just like e-cash.

E-cash is usually stored on computers or mobile devices. Common forms are software ‘wallet’ programs that are installed on the PC. These wallet programs communicate with the bank or e-cash issuer when a transaction has to be made.

All transactions are secured using complex encryption techniques. The transaction is completed after user verification. The value of e-cash required is taken from buyers’ account and deposited in the account of seller. E-cash does not require installation of programs and can also be collected by browsing certain sites or purchasing with cash.

Anonymous: In the anonymous type, transactions made by the user cannot be traced back to him. Money is credited from the user’s e-cash account, but no one would be able to trace where it went. This is most popular kind of e-cash in use now since it is similar to paper money we use.

Identified: In this type it is possible to trace back the transactions to user.

Online: The transaction takes place through the intermediary such as a bank or an e-cash provider, over a network or the Internet.

Offline: This does not require any type of intermediary and can be done without connecting to the third party.

Smart cards are yet another form of e-cash that are developing rapidly. Here, e-cash is stored in embedded chips and the transaction method is similar to that of credit cards.

Similar to paper, e-cash also works in a two-way stream in the world. You can send or receive e-cash from others. Unlike credit card transactions, it is not possible for others to know the market personal details on the Web from the e-cash transactions.

Let’s face it. The Internet is not a very safe place. As such security levels are of the highest standards in the e-cash system. This is made possible using encryption and digital signatures.

Secondly, it is universal. E-cash you have in India is also valid in other countries. Another useful feature of e-cash is that it can be split in to smaller units more easily than real money. E-cash is also ‘age resistant’ in nature. The digital nature of e-cash you have now will be valid even 50 years later.

Let’s face it. How many of us would like to go through tiresome process of registering and logging on to sites when we need something as simple as book or shirt? Governments and banks simply do not accept e-cash as they object to anonymous nature of e-cash transactions. It would be difficult to prevent tax evasion and money laundering if e-cash transactions become common. This is in a way explains why e-cash is taking much time to develop.