E-Cash is an internet-based system that facilitates the transfer of funds anonymously. Similar to credit cards, E-Cash historically has been free to users, while sellers have paid a fee. it is a system of purchasing cash credits in relatively small amounts, storing the credits in your computer, and then spending them when making electronic purchases over the Internet. Digital cash can also be stored on an electronically sensitive card.
Pros of E-Cash
-The customer is a convenience because customers do not have to bring the change with them E-cash is either in an E-Cash account waiting to be drawn upon, or is conveniently loaded onto a credit card size.
-For the merchants, E-Cash allows access to a global market not restricted and controlled by local currencies. The integration of ordering and payment collection systems also offers enormous operational efficiency. E-cash can also be programmed to restrict or limit the types of purchases made, unlike paper money.
–The online electronic cash systems that are operated through the Internet, provide convenience to the user and the banker. The online system can be accessed through the Internet from anywhere in the world. Hence, the user does not have to actually go to the bank to transact any business.
– online shopping is the shopper can sit at home and purchase the goods he wants, with the help of a credit card. The ‘smart’ cards can also be restricted to specified payments. For example, the parents of a student studying in a far-off university can charge his smart card that can be used only for paying tuition fees.
Cons of E-Cash
– only consumers with PCs would have ready access to use it, while those without, many low-income consumers would not.
-it may be less secure than bank money, given that money stored on an electronic wallet could be lost forever should the card is damaged.
–Fraud is the primary concern when it comes to e-cash, including those making counterfeit digital money that is difficult to distinguish from legitimate money.
-Any type of hacking that results in the theft of e-cash could mean that the fiduciary responsibility may land on your shoulders, particularly if doing so has put you in a position of non-compliance where fees and penalties could also be added to that burden.
-More importantly is the governments need to monitor money flow and trace criminal activities. These problems need to be addressed and resolved in order to gain consumers and government trust. With the traditional system of money exchange.
-Money laundering and tax evasion could proliferate in stateless systems as criminals use the untraceable cyber dollar to hide assets offshore.