Electronic Cash

Digicash: Ecash

“With ecash you can pay for access to a database, buy software ora newsletter by email,play a computer game over the net, receive $5 owed to you by a friend, or just order a pizza.”

Ecash Details

Must obtain ecash from an entity, which will give encrypted “coin” to individual to spend

Entity will agree to “cash” back the coin Only customer has the serial number of the

coin, but the bank has the key to the encrypted message

Anonymous, private (Mark Twain Bank)

NetBank: NetCash

Coupons of differing denomination are sent to purchaser with serial number

When spent at participating merchants, message sent to NetBank, that confirms coupon, and tells purchaser of such

No anonymity, no encryption Dependant upon bank as intermediary

CyberCash: CyberCoin

“Consumer wallet” software allows for micropayments tied directly to an account at a bank encrypted message transfers value by

notational system, i.e. debit from consumer’s account and credit to merchant’s account

safety, less anonymity

Electronic Checks

Simple systems (most now) actually print and send physical check through regular banking system (example: Netchex, ABS Web Checks)

BankNet Electronic Banking Service offers “live” electronic checks, using encryption and digital signatures

Credit Cards

Theoretically need no particular system, could give out information as over the telephone

CyberCash offers free software tht uses encryption and imposes Cybercash as the intermediary in the transaction (possessing the key to decrypt the credit card info passed to the merchant)

Smartcards

Imprecise definition between smartcard and stored value card

Card which, by computer chip or magnetic tape, can transfer information which indicates right to payment

Used much more broadly in Europe than in U.S.

Mondex

Uses card reader hooked up to computer terminals

May be used either on or off line Can accept up to 5 different currencies Encryption and digital signatures

Applicable laws

Money: US Constitution does not allow states to mint money

Checks: Mostly by UCC Article 3 and 4; also Federal Regulations

Credit Cards: Private Agreements and Federal Truth in Lending Act

Electronic Payments: EFTA and Article 4A

Checks

Banks would suffer the loss for forgery, unless the customer’s negligence contributed to the loss