Electronic Money (Micromoney)

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Electronic Money(Micromoney)

• Luis Enrique Heredia Figueroa

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Agenda

• Concept
• First and Current Implementations
• Smart Card Based Systems
• - Open System
• - Close System
• Alternative Systems
• Software Based Systems
• Evolution, future approaches
• General Issues
• Conclusions

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Concept

• Money exchanged eletronically
• involving microprocessors
• computer networks,
• internet and digital stored values.
• Two General Forms
• Card Based
• Software Based

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First and Current Implementations

• Smart Cards
• Generally defined as a portable data storage
  device with intelligence (chip memory) and
  provisions for identity and security.

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First and Current Implementations

• Some History
• 1970 - First implementation of microelectronic
  devices in plastic substrate (Kunitaka Arimura)
• 1974 - First patent An independent electronic
  object with memory (Roland Moreno).
• 1979 First smart card by Honeywell Bull
• 1980s First Trials in France
• French Bank Card Association (Blue Card, Green
  Card, TA)
• University Cards in France
• Date Information took from The Changing Face of
  Money, Good Barbara

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First and Current Implementations

• Smart Card (Open System)
• The scheme allows the value on the card to be
  used in the same manner as any other payments
  method or form currently in the specific place.
• Promblems for wide development Need for terminal
  to process transactions, clearing and settlement
  system.

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First and Current Implementations

• Unaccounted Electronic Money Model
• Transactions closely proximate to cash ones
• Aim to provide universal cash replacement
• Without a full audit trail
• Mondex Card

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First and Current Implementations

• Accounted Electronic Money Model
• Provide a general audit trail
• Archiving Functions
• Does not permit the anonymity of incorporate it
  into the Web browsers

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First and Current Implementations

• Graph took from The Changing Face of Money, Good
  Barbara

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First and Current Implementations

• Smart Cards (Closed System)
• A stored-value card that only can be used for one
  purpose or only in one determined environment.

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First and Current Implementations

• Octopus Card
• Singapore
• (Public Transportation payment)
• Chipknip

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Octopus Card

• Rechargeable without contact stored value smart
  card (mass transit system in Hong Kong)
• Nowadays convenience stores, supermarkets,
  parking meters, vending machines, etc.

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Off-line Electronic Money

• The merchant does not need to interact with the
  bank before accepting a users coin.
• Merchant guaranteed that the users e-coin will
  be accepted by the bank (the bank is able to
  identify cheating user).

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Off-line Electronic Money

• Blind Signatures to achieve unlikability between
  withdrawal and spend transactions.
• Using cryptography
• Anonymous e-cash was
• Introduced by David Chaum

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Alternative Systems Software Based Systems

• Main Topic Internet
• Several Schemes devised to make purchases secure
  over the Internet
• Security Main concern for the method developers
• Open Network
• MasterCard and Visa agreement for SET (Secure
  Electronic Transactions) standard (1996)

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Alternative Systems Software Based Systems

• Digital Gold Currency
• Paypal
• Liberty Reserve

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Evolution, future approaches

• Objectives
• Turn it able to use it through wider range of
  hardware such as secured credit cards
• Linked bank accounts for exchange with a secure
  micropayment system (Paypal)

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In General

• Advantages
• Convenience
• Privacy
• Increased efficency of
• transactions
• Lower transaction fees
• New business opportunities

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In General

• Disadvantages
• How to levy taxes
• Possible facility of money
• laundering
• Exchange rate instabilities
• Shortage of money supplies

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Conclusion

• At the end, it is necessary to search the more
  suitable cyberspace and microprocessor use
  regulations or laws that manage the transactions
  and watch for signs of trouble to help this new
  concept that seems to be the next step in
  business development, generally speaking.

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• THANK YOU
• FOR YOUR
• ATTENTION