Electric Money Term Paper

Download this Term Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Term Paper:

electronic money, and a description into the various types of electronic money.

Computers and telecommunications devices may come in place of paper currency and checks - during a course of time. Also, electronic ways of transaction of money have turned out widely prevalent. Anyhow, in the recent past debate about "electronic money" has witnessed a dramatic change, narrowing down to the level to which new ways of electronic money will in course of time turn central banks out of date, making them fragile that they cannot manipulate inflation. (Stevens, 72) Electronic money can be considered in terms of electronic substitute for coins and banknotes, which is saved on an electronic gadget such as a chip card or computer memory and which overall is meant for the reason of influencing electronic payments of restricted loans. (Directive 2000/46/Ec of the European Parliament and of the Council, 2)

Analysis

Electronic money is not new and also not that unusual. As per a U.S. Treasury official, Western Union molded the first electronic funds transfer (EFT) in 1860, the year when Lincoln won the position of the president of the United States. This EFT was implemented by telegraph, and was meant to be an analogue more than a digital payment, but it was anyhow an electronic payment. Adding up to this, the technology to help this variety of EFT can be pointed back to May 1844, when Samuel F.B. Morse first showed the function of telegraph. Also, Fed wire initiated as a Federal Reserve telegraph system dating back to 1918. Also, SWIFT and CHIPS can be pointed back to the early 1970s. Electronic money is a time worn theory, and adding up to this, majority of the money is now electronic. In the economic sector of the U.S. And other nations, banknotes and coins form only a small portion of what we usually define as the "money stock." Only the smallest total of money, MO -used by a handful other than the British - is constituted mainly of metallic and paper currency. The smallest monetary total inside which majority of the theories of electronic cash would come into, M1, is constituted of currency, traveler's checks, demand deposits, and other verifiable deposits. Among countries that have a strong application of checks, like the United States, banknotes and coins make up only a least share of M1. The bigger the monetary total, the narrower would be the share of banknotes and coins. (Electronic Cash and Monetary Policy)

Acknowledgement of the idea that electronic money is a small amount of money in a function of monetary intervention, gives an analytical design for a better realization of issuing the electronic money, as well as of the implication of money that is released. (Piffaretti, 3) The early advantages would be widely prevalent and is very basic. Robbing of cash would turn out of question. Robberies in banks and robberies of cash register would become nil. Aggression on vendors, cab drivers, and cashiers would be terminated. Streets in the urban areas would turn much protective. Costs of security and rates of insurance would face a downward curve. Values of property would face an upward curve. Selling illegal drugs with the prevalent aggression should wane.

There would be less congestion in the hospital emergency rooms. An evolution from cash to recorded electronic money would be in context with a transaction of preceding unpaid income tax revenues running in the tens of billions of dollars. Resultantly, income tax rates could be mitigated or the national debt decreased. (Warwick, 36) Electronic money can have existence as a real electronic work of art. It may be a storage that points out to $2,000, but associated with it there is a biometric that pinpoints its owners. This might be a record of the fingerprint or a voice print or an iris print or an association of these entities, added up with the data like name and address etc. This spontaneously constitutes a major variation, due to the fact that this is a property that identifies the owner. If we cut off $100 and apply it to pay for some other thing then the money shifts its ownership, but it can have a record of the last owner if it prefers to do so. Small chunks of e-money could have a limited audit trail of ownership. This is of considerable interest due to the fact that it turns it arduous to rob while it stays in the e-money pool and when it passes it will record how it passed. In context of strict money it can perform two things that are very applicable. On the first hand, e-money can be applied to pay any amount how much ever small the amount may be.

To admit the fact there is a constraint to this, but the expenditure of a transaction can be very less when all that is occurring is the penning down of records to disk. So there is a possibility to make people donate a few cents per web page at new sites. At this particular juncture a bigger resistance to paying is that it is so clumsy. You might accept paying a yearly subscription of $100 to make a visit of a newspaper site as and when you require to read the news, but you do not require a year's value of it. As such, this arrangement makes the casual reader remote and a majority of the readers on the web are casual. Any how along with electronic money one can help making micro payments of a few cents of even much lesser amount than a cent and the expenditure of billing on a basis of every months, may be as low to make it all possible to be implemented. (What is Electronic Money Anyway?)

Of second importance and more significantly, e-money can retain interest. As such, as the money retains itself within the e-money pool it can be exploited to buy safe interest carrying government bonds. This has implication that the money pool is accumulating interest most of the time and it can do it in a moment. Currently money (i.e. Paper money) carries interest daily at best but e-money can carry interest most of the time. This is of particular importance, due to the fact that if one makes this interest observable, it will result in people making payments during the event of trading and to extract interest for late payment. The cost that the retailer mentions is the cost presently not in 5 days time when the check has made clearance. So if one is on the search for a purpose as to why most of the banks may be very indifferent about e-money, the reason lies there. (What is Electronic Money Anyway?)

The cost in society of a system of payment constitutes around 1% to 1.5% of GDP. This amount may be mitigated if non-cash payment make a move from paper to electronics due to the fact that the cost of an electronic payment is assumed to be from one third to one half that of a paper-based transaction. (Humphrey; Pulley; and Vesala, 920) The major prominent attribute of digital money in the course of time, in the United States, could be a mixture that enables value of money to be put on smart cards from customer bank accounts either via home banking software on one individual's computer or via the approximately ever existent Automated Teller Machines. Then there is the possibility of the money being exploitable through the internet, through hotspot terminal in retail outlet, or in vending machines, fare machines, or through the telephone. Such a system is not ye prevalent, and repeatedly will incur the big block of making prominent acceptability and applicability. Some revelers in the enthusiasm require digital money to turn "just like paper money" freely transmittable between any two people rather betwixt pre-certified, licensed merchants and customers. This would need it to be moveable and easily transmittable, exchangeable, of long time, able to split, simple to apply and without name or not able to be traced.

Others require digital money to have quality that paper money lacks - it is possible for it to be user friendly and able with certain constraints, for instance, place again if lost or destructed. Or parents might require donating increments in the attribute of digital money that cannot be spent for tobacco, liquor, or junk food. While digital money has the potentiality of application of Internet micro payments, at the other corner of the size range it may be a great advantage in between company electronic transactions, or "Electronic Data Interchange" (EDI). The computerized exchange betwixt corporations of product information, mentioned ones, bids and offers, orders, and invoices sharply mitigates transaction costs for businesses that are associated in complex supply chains. Also, the Federal government is slowly and step-by-step changing its contracting procurement operations to EDI. (Bonorris, 44)

But that which is lacking in the EDI, whether continued via value added commercial networks or over the Internet,…[continue]

Cite This Term Paper:

"Electric Money" (2003, November 25) Retrieved November 30, 2016, from http://www.paperdue.com/essay/electric-money-157635

"Electric Money" 25 November 2003. Web.30 November. 2016. <http://www.paperdue.com/essay/electric-money-157635>

"Electric Money", 25 November 2003, Accessed.30 November. 2016, http://www.paperdue.com/essay/electric-money-157635

Other Documents Pertaining To This Topic

  • Money and Recognition Are Important Motivators for

    money and recognition are important motivators for employees. There are a number of job-related factors due to which employees are and can be motivated. This is the reason why efficient managers always think about the needs of the employees and then plan and provide the proper motivation strategies accordingly. This is exceedingly important as a workforce that is motivated may eventually profit the organization by contributing in a positive and

  • Lincoln Electric Case Lincoln Electric

    Further this gives them a feeling that politics are not involved in the organization and people get what they deserve. Further the president stresses on the absence of any executive dining room. Management and workers sit together and eat. This promotes a sense of equality where everyone feels as if they are part of the same team. Moreover for any organization to keep the workers motivated is highly important. High

  • Globalization at General Electric Discussion

    This can fluctuate slightly with the economy and with new products that are created and must be launched, but the company is relatively stable in that it generally has a similar level of employees on hand in any given month or year and has had that level of employees since it has recently grown. It is likely that number will continue to rise. Description of products/services General Electric Company makes appliances,

  • Mckinsey and Lincoln Electric

    Lincoln Electric Company is seen as the world leader in arc welding and cutting products. The demand for welding products is consistently rising given exponential growth in important sectors of construction and energy and similar infrastructure projects. Important end markets for Lincoln Electric include pipeline, building, metal forming, power facility construction, defense and construction industries etc. McKinsey's 7-S Model can be applied to Lincoln Electric Company to analyze the company's

  • Science Augmenting Traditional Electric Power

    South Florida, especially Broward County, has showed the most eagerness, with eighty seven percent in favor of solar energy investment. Central Florida and the Gulf Coast were close behind, and eighty percent of those living in North Florida also favored more state venture for solar energy. While voters of all ages said they approved of spending more on solar, ninety three percent of those between eighteen and thirty four agreed.

  • International Visit General Electric s Corporate

    Other tools frequently used in this approach are positioning surveys and moving-average trend following trading rules. Fund managers regularly use these patterns to take informed decisions for short-term investments (Exchange Rate Forecast, 2010). Exchange rate risk affects both revenues and costs, which in turn affects a company's marketing, production, and financial decisions (Shapiro, n.d.). If a company's revenues are down then they might find themselves with less money to produce

  • ACME Electric Motors and Controls

    2. Long-term strategies Marketing On the long run, the American organization should try to enlarge and consolidate their market share. They should constantly conduct research as to identify the new needs and wants of customers and integrate them within the ACME products. The success of this strategy will be obvious once the manufacturer is able to identify and satisfy needs before the clients become aware they even had those demands. The long-term


Read Full Term Paper
Copyright 2016 . All Rights Reserved