Electronic Cash: Advantages, Disadvantages, and Forms

This article discusses electronic cash, its advantages, disadvantages, and forms such as online and offline. It explains how smart cards work and how digital money improves security during transactions. The subject is relevant to finance and technology courses.

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Electronic Cash
Name
Degree
Institution

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Abstract
The electronic, also known as digital cash is a mode of changing the physical money into an
electronic payment by use smart cards instead of carrying coins and notes. The electronic cash is
downloaded into smart card. The smart cards carry out the transaction with anybody on the
planet having the money in soft form.

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Electronic Cash
A few years ago, people used to go to financial institutions such as banks to either
deposit or withdraw cash and stand in line to do so (Prina,2015, p.115). Today thing has
a change in a way that you don't have to be at the bank to access banking services. The
banks have come up with electronic cash method that stores the financial value of your
bank’s account electronically on the computer of your bank. You can access your money
without having to go through the counter by downloading your cash into your hard drives
such smart cards that act as your virtual bank account.
The Online Form of E-cash
The technology uses the internet, computers, Local Area network for the transfer of
money for services and services (comer,2018, p.0). This aids one to carry out Internet shopping
and go in a business done through the Internet, while still in his/her house or office from
anyplace in the globe. This method involves three entities: the purchaser, the seller, and the
service provider. Inside the Internet, local area networks regulate the flow of digital cash
between the bodies or the bank accounts of the same person. It enables one to send money from
one part of the world to the other within a flash of a second.
The Offline Form of E-cash
In offline methods, we use smart cards such as Debit and credit cards that are feed with
electronically the monetary value of your bank account and are updated every time you transact
(Kwan, 2014, p.0). Through these cards, you can do all bank operations such as withdrawal,

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deposit and check balance through the Automatic Teller Machines in the banks. You can still use
the same cards to pay for goods and services.
Advantages and Disadvantages of Electronic Cash
Though the use of electronic cash, it enables one to do business faster and with people
from a far distance thus saving time and resources for travelling (Drucker, 2014, p.0). It also
improves security during the transaction as one can do business with soft money rather than the
physical money that can be easily be stolen. On the other hand, digital money has some security
threats where one can hack it your bank account and mess with your money. Another challenge is
that the electronic money transfer is dependent on some factors such as electricity and internet
and without this two, it is impossible to use electronic money transfer. The advantages of digital
cash are more compared to disadvantages and have led to a more significant improvement in the
business transaction.

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References
Comer, D. E. (2018). The Internet book: everything you need to know about computer
networking and how the Internet works. CRC Press.
Drucker, P. (2014). Innovation and entrepreneurship. Routledge.
Kwan, K. H. (2014). U.S. Patent No. 8,650,126. Washington, DC: U.S. Patent and Trademark
Office.
Prina, S. (2015). Banking the poor via savings accounts: Evidence from a field
experiment. Journal of Development Economics, 115, 16-31.

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