Electronic Currency

Electronic/digital currency has many names, which include electronic/digital money, electronic/digital cash. All of them refer to the same thing, which is money exchanged electronically through computer networks, the internet and many similar electronic payment systems, for example the electronic funds transfer (EFT) system.

One of my best friends used to work in Hong Kong, and when he told me about life over there, he mentioned a stored-value card that he used to make almost all payments that he had to make while he was there.

This stored-value card, called the Octopus card, is an example of the successful implementation of the e-currency payment system in Hong Kong. It is a rechargeable smart card where users must pay a refundable deposit upon obtaining one. The Octopus card can be used to pay the fares for almost all the public transport in Hong Kong, to make payments at convenience stores, shopping complexes, restaurants, parking fee and even on vending machines.

There are many different types of Octopus card for different types of citizens. For example, elderly citizens (60 years old and above) can purchase the green Octopus card, which when used at any card reader, will automatically deduct any available discounts.

Similarly, in the US, the Eagle Cash or EZPay system of stored-value cards is used at US military bases domestically and overseas. Soldiers’ wages are credited into these cards, and they can use these cards to pay for goods and services in the military bases.

In Malaysia, the concept of e-currency is growing, as can be seen from electronic payment systems such as TouchNGo which uses stored-value cards to allow users to pay for tolls, RapidKL buses and LRT tickets, and also parking fees.

The proliferation of e-currency is brought about by its enormous benefits. For individuals, e-currency provides increased security because there is no longer the need to carry cash and be exposed to physical theft. Organizations, on the other hand, can greatly reduces the labour hours needed for non-essential tasks like counting and safeguarding physical cash, as well as reducing transaction time.

However, just like everything else, e-currency has its disadvantages too, as it opens another window for fraud when hackers are able to break through the e-payment system's security. E-currency also makes it difficult to trace who made the payments.

Since the benefits of electronic currency far outweigh its costs, it looks like e-currency is here to stay. Who knows, maybe someday we will all live in a cashless world where notes and coins are only available on display in banks or muziums for our children to gape at. ^_^.