Pre-paid cash card for consumers

What is a prepaid cash card?

Basically, pre-paid cash card is an alternative way to make payment. It works by loading money into the card and you can use the card for various or specific paying purposes. It does not require deposit account and there is no credit or overdraft allowed. The limit of the card depends on how much electronic cash you have loaded in.

The application of prepaid cash card could be broken into a few categories:

1. Substitution of cash

- Prepaid cash card can be used as a paying or purchasing mechanism. We can pay by using this card rather than cash. It is convenient for the consumers because they do not need to carry much money when shopping. Other than that, it is safer than cash because we can recover the money loaded inside the card if the card gets stolen but stolen cash is usually not recoverable.

2. Purchase online

- Pre-paid cash card acts similarly with credit card which allows us to purchase items online. Online purchasing will be the future trend and it is usually not convenient for those people who are unable to register for a credit card. Pre-paid cash card can solve this problem as there is no requirement for salary or credit check during the application.

3. Accepted worldwide

- Usually, currency like Ringgit Malaysia can only be used to trade in Malaysia. However, present pre-paid cash card with Visa service allows us to pay for goods or services all over the world. A very popular example will be the Rush Visa Card in America.

4. Withdraw cash

- Most of the pre-paid cash card allows us to withdraw the balance in the card at ATM machine. However, it does not apply to all pre-paid cash card. The example of non-refundable pre-paid cash card will be the Touch and Go card of Malaysia.


Reference:

No Checking Or Savings Account? Use Prepaid Cash Card

Master Prepaid Card

Credit Card Debts : Causes and prevention

Credit card is a common and convenient tool provided by commercial banks to let consumers purchase on credit.


Yet, the situation is getting worse that most of the consumers misuse the credit cards and cause heavy credit card debts until they go into bankruptcy.




Credit card debts problems come from few reasons.

First, the availability of credit card. The rules and regulations to apply credit cards are looser than before. Some banks even charge 0% of interest on the credit card balance in order to get your business done. This is very seductive and people always get trapped although they do not need credit card.

Other than that, advertisement does play a role too.
The society tends to satisfy their desire at the moment, thus, credit cards advertisement would advocate their wish to apply for it.

Besides, people often think that credit card is one of the ways to represent their social status. For instance, other will think that one is very rich if one has platinum credit card. So, a number of people will apply for credit card and try to upgrade it.




Preventions:
Here are some tips to avoid credit card debts:

1. Pay the balance in full. You are advised to pay at least double of the minimum payment every month; otherwise the debts will keep rolling until you cannot afford to pay it.


2. Know your interest rate. Always keep checking the interest rate you are paying for your debts. Not only the interest rate you are offered but also when you get the approval. Sometimes credit card issuers will raise your interest rate with little warning.


3. Pay on time. Bear in mind that credit card issuers might raise your interest rate as a penalty in case you pay late. Always settle the payment before the bill is delivered to you to avoid extra unnecessary fine.


4. Do not depend on credit card. Bring some cash with you and try not to use credit card always. Swipe it only when you have planned it properly.


5. CUT IT ! Cut off your card so that you do not use it. But, whenever it is necessary, keep at least one as emergency backup.





References:

How to avoid credit card debt

Credit card debt prevention

Electronic Currency

Money has existed for thousands of years.
It has taken many forms, ranging from precious metals, conch shell etc. to paper notes and coins.

As Internet and computer become more common, money has evolved into a newer form, which is electronic currency.

Electronic currency, which is also known as electronic money, digital money etc., refers to money or scrip that is exchanged only electronically with the use of computer networks, Internet and digital stored value systems.


Followings are some of the examples of electronic currency:

PayPal

In today’s world, many companies are providing electronic currency services.
One of them is PayPal.
PayPal is a well-known leading online account-based e-payment service provider.
Users need to create a PayPal account before they are able to purchase online or transfer money to anyone who has PayPal account.
Payment can be made in any currency and may later be converted into any desired currency.




There are some characteristics which define “Electronic Currency”.

i) Real time & irreversible

ii) Private & anonymous

To know more on the characteristics of e-currency, please click here.




Advantages of electronic currency:

I) Privacy & confidentiality

Since the transfer of electronic currency is done privately and anonymously, no personal details are transferred to the merchant.

II) Security

The adoption of encryption method can enhance the security of electronic currency.

III) Convenience

Customers do not need to bring large amount of cash with them. Users can make online payment wherever they are and whenever they want using credit card size smart card.



Disadvantages of electronic currency:

I) Fraud

Hackers may hack into the user’s bank account and illegally retrieve his or her records.

II) Peer-to-peer double spending risk

Double spending is a problem where a piece of electronic currency is duplicated and both copies are spent.


Requirements of electronic currency system:

a) Security

b) Anonymity

c) Scalability

d) Acceptability

e) Interoperability

For a detailed explanation on these requirements, please click here.




In this digitalised century, electronic currency is becoming more common and popular as it makes our life much easier.
Even though there are some risks associated with electronic currency, consumers can actually choose to avoid it.
For instance, they can opt to include intermediary in their transactions to avoid peer-to-peer double spending risk.
Once the electronic currency industry is able to guarantee the safety and trustworthiness of the transactions, it will definitely benefit us.






References:

Electronic money - advantages and disadvantages

Electronic money - Wikipedia

What is digital currency: digital money & real cash

Mobile Payment Systems in Malaysia

Mobile Payment Potentials

There are 25 million mobile phone subscribers in Malaysia with 88% of the Malaysian population subscribing to mobile phone services.

With this high penetration rate, there is no doubt that Malaysia is provided with immense opportunities to deliver mobile payment products that offer fast, simple, convenient, cost-effective, or even efficient method of delivering financial service in the remote areas.

Besides, having 55 million deposit accounts in the Malaysian banking system also reflects that a high percentage of Malaysian population have participated in the banking system of Malaysia.

With the high rates of mobile subscribers and participation in banking system, the potentials of the mobile payment system is clearly shown.


Consumers’ adoption strategies

1. Interoperability and collaboration between industry players, such as mobile operators and banks play a crucial role in realizing the potentials of mobile payment.

• By developing a common infrastructure and standard, an easily accessible, open and lively payment ecosystem will be created and this will certainly attract more consumers to join.

• Maxis Communications launched the world’s first contactless mobile payment service, Maxis FastTap, which is an integrated mobile payment service that uses NFC, together with the partners Nokia, Visa, Maybank and Touch ‘n Go on 9 April 2009.

2. Releasing the economic benefits, such as cost-effectiveness and efficiency gains that customers and businesses seek, by offering new and innovative mobile payment products will also encourage the consumers to adopt the mobile payment system.

• Sybase 365, a subsidiary of Sybase, Inc (NYSE:SY), has been selected by Celcom to power AirCash, an Unstructured Supplementary Service Data (USSD) based mobile financial service to Malaysian customers.

• It enables the customers to transfer money locally and internationally, airtime topup, mobile payments for utility bills, mobile commerce and others.

3. Building security and authentication standards in the mobile payment system will eliminate the worries of consumers when adopting this system.

• Mobile Money, a PIN-based Mobile Payment Solution desiged by Mobile Money International Sdn Bhd, allows the registered users the pay the merchants using mobile phones coupled with a 6-digit security PIN via SMS without needing to physically present at the store.

• It removes the need to disclose individual’s credit card information when taking online orders.

• Mobile digital signature also provides confidentiality, authenticity and integrity using mobile payment for the delivery of financial services.

References:

1. Governor’s Keynote Address at the Mobile Digital Signature Symposium 2008 –“Towards a More Efficient Payment System: Electronic Payments"

2. “World’s first contactless mobile payment system” launches in Malaysia

3. Mobile Money (MM Wallet) Overview

4. Sybase 365 Launches First USSD Mobile Financial Solution in Asia Pacific Region