Electronic Currency

Nowadays, many people are consuming product such as mp3, eBooks and other product through internet. As a result, there appears a growing demand for electronic currency (e-currency) payment technologies that enable the purchase their desired items.

What is Electronic currency?

Electronic currency (also known as e-money, electronic cash, electronic currency, digital money, digital cash or digital currency) refers money which is exchanged only electronically. This process involves use of computer networks, the internet and digital stored value systems. The examples of e-money are the electronic funds transfer (EFT) and direct deposit.
The following are companies using electronic currency system:

1. PayLoadz (payloadz.com)

2. BitPass (bitpass.com)
3. Paystone (paystone.com)
4. Peppercoin (peppercoin.com)


Examples of e-currency

PayLoadz, Inc. is a web development company which was founded in 1996. The privately-held company has over 60,000 registered users selling over 280,000 downloadable goods. PayLoadz is a service that sells intangible products such as softwares, e-books, digital art, manuals, articles and anything else that can be downloaded. It is an automated delivery service. This means that seller can go travelling without worrying about sending download links to the consumers every time a payment is made. These files can be either downloaded via hyperlink or sent via e-mail based upon seller’s product.
PayLoadz operates using PayPal's online payment system and Google Checkout. It offers two types of pricing: flat monthly fee (based on the size of sellers’ files) and another one is a fee that is a percentage of sellers’ sales, typically 15 percent. PayLoadz is a member of the PayPal Developer Advisory Board. As such, one of the requirements to use PayLoadz is that sellers need to have a Paypal Merchant Account which is free.


There are benefits given Payloadz:
Secure file storage on our servers
Automated delivery of your digital goods immediately after payment
Sell anywhere online: your own site, our Store, eBay and more.
Affiliate Builder, a fully-functioning affiliate tracking and payment system
Supports Downloads and CD fulfillment

Bitpass was another example of the online payment system for digital content and services. It was founded by Kurt Huang in December, 2002. It also partnered with major technology and financial services companies such as Microsoft, PayPal, the Royal Bank of Scotland and First Data.It works similarly to a pre-paid telephone card. What you need to do is you need to sign up for the service and top up into your account using a credit card or PayPal. Then the money then will credit towards your purchase.
However, on January 19th, 2007, CEO Matthew Graves make an announcement through an e-mail to customers that Bitpass will shut down due to circumstances beyond their control. On January 26th, 2007, the operations officially closed.


Advantages and disadvantages of e-currency
E-currency increases the process of transactions by provides the individual with lots of convenience. It also having a lower transaction fees as well as providing more business opportunities with the expansion of economic activities by globalization.
However, there are some drawbacks in using e-currency. Some of the disadvantages are how to levy taxes and the possible ease of money laundering. There are effects on macroeconomic such as exchange rate instabilities and shortage of money supplies (total amount of digital cash versus total amount of real cash available, basically the possibility that digital cash could exceed the real cash available).