How did the idea of electronic cash transactions begin?

Electronic money is a payment method used in electronic cash transactions, which are computer networks and the Internet. The value of money from customers is stored in some electronic media. Electronic money is often referred to as electronic cash, digital money, digital cash, electronic currency, or digital currency. E-money is very safe to use and even the science of cryptography states that it is very difficult to hack or hijack e-money so there is no need to worry about using it.

Topic Contents Toggle How did the idea of cash transactions begin?

Electronic The first appearance of the idea of electronic cash transactions How electronic money works Type of electronic money Prepaid programs Prepaid card Benefits of electronic money Advantages and disadvantages of electronic money 1. Advantages of electronic money The advantages of owning electronic money are: 2. Lack of electronic money The disadvantages of electronic cash transactions include the following: How did the idea of electronic cash transactions begin Digital money or electronic cash transactions is another form of currency that we know so far.

Although the difference between electronic money and traditional money is very striking, there is no difference in the exchange rate between electronic money and traditional money. What distinguishes electronic money from traditional money is its unlimited flexibility and accessibility. This is because the electronic money transaction base uses a system that is connected over the Internet and without the need to bring together the people who transact together. The development of electronic money itself began in 1960. At that time, computer giant IBM in collaboration with American Airlines created a system called SABER (Semi-Automatic Business Research Environment) that allowed American Airlines offices to be coupled with terminals connected to the telephone.

It is the network that allowed the company to directly check the departure schedule, seat availability, and digitally issue an order that can then be paid using the credit system. The idea of electronic cash transactions first appeared in the 1970s. Banks in America and Europe used mainframe computers to track transactions between branches and other banks. This system proved successful in bypassing international restrictions on the required exchange rates. Until 1983, a research paper by David Chaum introduced the idea of “digital money.” David Lee Chaum, born in 1955, is a computer scientist and cryptographer.

He created several crypto protocols and founded the digital money company Digicash. Digicash was founded in Amsterdam to commercialize David's ideas, but unfortunately the company went bankrupt in 1998. In 1999, David left the company.

In 1997, Coca-Cola was the first company to offer transactions from vending machines using mobile payments, after which the well-known electronic money services company PayPal came to the public. In 2008, a separate exchange rate for digital money called Bitcoin appeared. This is where the terms digital currency and virtual currency come from.

How does electronic money work? Using electronic money transactions does not require an authorization process such as using a PIN or signature, because electronic money is not directly linked to the customer’s account at the bank. Using electronic money does not charge payment to a bank account, as with a credit card or debit card like other prepaid, you can also charge your card. Customers who have e-money of certain denominations first register the e-money at the counter of the e-money issuer to activate it.

Furthermore, the value of funds reloaded (to be filled out and registered) on electronic media, for example a card issued by a bank, a mobile phone or a prepaid card. Authorized retail outlets (merchants) Shopping places that debit the amount according to the transaction Every time a transaction spike occurs, the merchant's computer connected to the electronic money issuer's network performs a kind of clearing account. As with prepaid cards, users can also top up or top up e-money.

The use of electronic money does not require any licensing process and is not directly linked to the customer’s account at the bank, so that payments made via electronic money are not charged to the customer’s account at the bank. Type of electronic money As for electronic money, it is divided into two parts, and the following is the definition of electronic money according to its type, which are: Prepaid programs Prepaid programs, also known as digital cash, are electronic money whose value is stored on a hard disk in a computer. Prepaid Card Prepaid cards are referred to as electronic cash transactions and are electronic money whose value is stored in a chip embedded in the card.

BCA Bank is the first bank to benefit from the development of electronic money technology by issuing prepaid cards with advanced technology. You can use this card at many merchants that cooperate with BCA Bank. Meanwhile, Mandiri E-Money is a prepaid card issued by Bank Mandiri, Brizzi is issued by BRI Bank and BNI Prepaid is issued by BNI Bank.

Apart from the banks mentioned above, there are also non-banking institutions that also issue prepaid cards, such as Telkomsel. The use of electronic money does not require an authorization process such as using a PIN or signature, because electronic money is not directly linked to the customer's bank account. Using electronic money does not charge payment to a bank account, as with a credit or debit card like other prepaid, you can also charge your card.

Benefits of electronic money: Through electronic cash transactions, you can conduct many transactions easily and practically. So, here are some of the advantages of using electronic money, which are: Read also: What does floating currency mean and what are the pros and cons of the floating exchange rate? Providing convenience, speed, and practical application in conducting various payment transactions, so you do not have to bother preparing money for payment. You do not need to receive change in the form of goods such as candy, because merchants using electronic money only need to redeem it directly through the computer network. It is very applicable because it can be used for many high frequency small value bulk transactions, e.g. tolls, transportation ticket payment, parking, fast food, etc.

Advantages and disadvantages of electronic money The advantages and disadvantages of electronic money include: 1. Advantages of electronic money The advantages of owning electronic money are: You do not need to bring money for shopping or to pay for parking, and you can use it in the available place with a special electronic money card tool. Transactions become more accurate because they are managed by computers and machines.

You do not need to wait for the change because the face amount will decrease as much as the amount you need. There is a database that can record all the transactions you make so you don't have to remember what the money is for. Transactions become faster.

2. Lack of electronic money The disadvantages of electronic cash transactions include the following: vulnerable to hacking or intrusion because they use electronic systems and the Internet. There is a risk of data loss due to software errors.

Not all places have the tools used to use digital money, and not all places use electronic money, including merchants. The money you save in electronic money will be lost if you lose the card or device used to save money.