The Application of Prepaid Cash Cards For Consumers

What is Pre-paid Cash Card?
Prepaid Cash Card is plastic card that consumers put money on the card, which they can do over the phone or online, and then consumers can use the card to make purchases or also online purchases. They can continually put money onto the card if they want, but they cannot spend more than the balance they have left. Prepaid cash cards are designed to be used as a safer alternative as compare to cash.

The Application of Prepaid Cash Cards

The prepaid cash card is very useful in several ways, such as payment of toll fare, public transportation, payment of parking services and so on. Nowadays so many people tend to have or already have their own prepaid cash cards because prepaid cash card is indeed a good invention that makes life easier, it contributed a lot in eliminating debt risk with no chance to spend too much as the balance is limited to the amount reloaded, and the convenience that it provide is indeed great. Different countries have the different use of prepaid cash cards.

Specialised Touch 'n Go lanes are provided at toll plazas in Malaysian Highways.

In Malaysia, the most popular prepaid cash card is Touch n’Go card. Touch 'n Go can be used in entire highways stretches in Malaysia with the familiar TnG & SmartTAG sign marked on the road. Besides that, Touch n’Go card can be use as an integrated ticket on the Public transportation system in KL, only 3 companies have implemented this into their collection system which are Rapid KL (rail and bus) KTM Komuter and KL Monorail. Touch n’Go card can also use in paying admission fees of theme parks such as Sunway Resort. It is not only for toll fare and theme park but also parking services and cashless payment at retail outlets. It is expanding its business to retail purchase by starting with fast food industry.

In Singapore, The EZ-Link card is a used for the payment of public transportation fares with limited use in the small payments retail sector. For paying transportation fees in the city-state 's Mass Rapid Transit (MRT), Light Rail Transit (LRT) and public bus service. The card also serves as a supplementary identification and concession card for student in nationally recognised educational institutes, full-time national service personnel serving in the Singapore Armed Forces, Singapore Civil Defence Force and Singapore Police Force or senior citizens who are over sixty years old.

The CEPAS compliant Adult EZ-Link card, introduced in 2009.

The defaced EZ-Link card, revealing the internal circuits.

Octopus reader at an MTR tickets gate

In Hong Kong, The Octopus card is popular used for payment of Mass Transit Railway (MTR). The Octopus card system was the first contactless smart card system in the world and has since grown into a widely used payment system for virtually all public transport in Hong Kong. The Octopus card is a rechargeable contactless stored value smart card used to transfer electronic payments in online or offline systems. The Octopus card is also used for payment at convenience stores, supermarkets, fast-food restaurants, on-street parking meters, car parks, and other point-of-sale applications such as service stations and vending machines.

The rainbow-coloured Personalised card is available on registration. The name and, if opted, a photo of the holder are imprinted on the cards. They can function automatically as a Child, Adult, or Elder card by recognizing the cardholder's age stored on the card, hence accounting for different concessionary fares.

The security of prepaid cash card is reliable such as personal identification numbers (PINs) protect consumers against theft and fraud therefore the use of Prepaid Cash Cards is popularly acceptable by the most of people or even foreign countries.

Credit Card Debts: Causes and Prevention

Credit card is a part of a system of payments named after the small plastic card issued to users of the system. It is card entitling its holder to buy goods and services based on the holder’s promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer from which the user can borrow money for payment to a merchant or as a cash advance to the consumer.

A credit card is different from a charge card, where a charge card requires the balance to be paid in full each month. On the other hand, credit card allows consumers to revolve their balance at the cost of having interest charged. Most banks and credit unions issued credit cards to consumers such as MasterCard, Visa and etc.

Nowadays, credit card debts are major causes of bankruptcies each year. The standards of living in a globalization world kept on increasing but our salaries and purchasing power remain the same. These problems cause consumers to turn to banks and credit unions to subscribe credit card. Therefore, these credit cards have planted debts in consumers’ pockets. These happened because many people never realized of its consequences from financial and non-financial perspectives when they get a new credit card. The following are some of the causes and prevention of using credit card.

Causes
One of the following causes of credit card debt might mirror our financial situation:

Excessive Medical expenses

Credit card will probably be the main source of funds to pay off medical expenses if health insurance is not adequate to cover the medical bills. In United States, almost everyone pays their medical expenses by credit card.

Gambling

As we all know, gambling has become part of our life as entertainment and fun. But when one is addicted to it, it’s hard to stop. Its fine if we spend our own pocket money but if we borrow money through credit card for gambling will lead to financial disaster. It’s like saying ‘digging your own grave’.

Poor Money Management
Poor money management also led to credit card debts by consumers who did not control their spending properly. Most people spend their money purchasing items that are valueless to them in near future. Debtors are unaware to conduct a proper monthly spending plan and did not bother to keep track of their monthly bills. These led us to the mountain of credit card debts.

Unemployment
When economic downturn, many people are unemployed and jobless. Households were forced to used credit card for their groceries, utilities and other expenses in order to maintain their current lifestyle when the main breadwinner of the household had lost his job and unable to find new job during short periods. This may lead to a rise in debt when expenses are not cut down in line with the reduction in income.

Prevention:

1. Avoid adding up more credit card debts
When you have a big sum of debts to pay, try not to apply any new credit card as it will increase your debts not reducing it. So, whenever there is a credit card showroom or salesperson approaches you, avoid it and try to say to no.

2. Making a budget
Try to have a habit of keeping every single receipt and bills to form a budget for all your expenses. Spend wisely according to your budget plan; hence, it will prevent you from overspending.

3. Self-control and discipline

One of the best practices is to have a strong self-control and discipline to avoid overspending. Consumers (users) can prevent these from happening by setting a list on what to buy and not to buy. Consumers should also follow their planned budget and limit the usage of credit cards.

Below is a video clip on how to overcome your debts:

In the nutshell, credit cards do come in handy when in need but when it comes down to settling the payments it’s a headache to users. Credit cards are meant for emergency only. So used it wisely or unavoidable causes will fall upon you and never try to run away from paying your debts.

Mobile payment systems in Malaysia: Its potentials and consumer's adoption strategies

M-payment (mobile payment) is a point-of-sale or transaction of money payment made through a mobile device, such as a cellular telephone, a Smartphone, or a personal digital assistant (PDA) and other devices.

Mobile payment systems can be used for purchasing music’s, ringtones, wallpaper and games (there are many of these type of service or product offered in Malaysia’s newspaper). Most Malaysian buys these ringtones and games via mobile payment, either via GPRS/WAP or SMS (premium SMS based transactional payments).

There are few types of mobile transaction can be made:

1. Premium SMS transaction

Premium SMS transactions are the most common in Malaysia, most mobile users download their wallpaper, music, ringtones and mobile games by buying them through SMS payment. SMS payment requires you to send a certain code to certain number to confirm you want to buy those products.

2. WAP (mobile web)
WAP payment is similar to SMS, you are required to select product you want from the web and a confirmation message will be displayed to you with the details of product before u can confirm it.

3. Mobile payment providers

Mobile payment provider is different they uses SMS and Web, it helps to extend the ability of mobile payment. There are few mobile payment providers in Malaysia, such as Mobile Money (http://mobile-money.com.my/index.html) who provides variety of products and services. By registering an account with mobile payment provider, you can top up your credit to them and use it to purchase products or services offered by them.

Mobile Money offers products such as food and beverages, car accessories and personal care products which can be viewed from their website. They also offer services such as buying or paying broadband bills (Steamy) by SMS the code of product to them.

Potentials:

Market still at developing stage, many new users enter into this market and enjoy the services provided by the Maxis, Digi, Celcom, U Mobile and others smaller service provider.

Many mobile phone users, the market is large as mobile phones become a need to all of us in nowadays. Even a primary school student also have a hand phone on his or her hand and this is the market that should grabbed by the service provider.

Low competition, the competition level still is low as the most people still blur on how to operate a firm that running mobile payments systems. This due to this market still in growth stage and more service provider needed to become a mature market.

Consumer’s Adoption Strategies:
Educate consumers about mobile payments, how to use and introduce its functions (e.g. bill payment, mobile purchase).

Enhance security and confidence to mobile users .

Collaborate with more banks and companies to widen the ability to pay via mobile at the same time it helps to increased customer’s satisfaction and confidence.

Maintain customer’s loyalty.

Reference addresses:
http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci211763,00.html

http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci330613,00.html

http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci214287,00.html

Electronic Currency

Electronic currency (also known as e-money, electronic cash, electronic money, digital money, digital cash or digital currency) refers to money or scrip which is exchanged only electronically. Typically, this involves use of computer networks, the internet and digital stored value systems.

E-micro payment system is small online payment company. There are five types of them, such as:

a) Firstgate's click and buy
Firstgate works with about 3,000 providers of articles, information, games, and other content for 2.5 million customers, mostly in Europe. For security, Firstgate uses passwords and secure sockets layer (SSL) encryption, similarly records the IP addresses of buyers’ machines for reference in case problems occur. The company charges content providers an up-front fee—which varies based on the complexity of the project—for set-up, integration, and consulting. It tailors its systems with business rules for each participating merchant. The company bills buyers’ credit cards, debit cards, or phone accounts, once they have accrued a few dollars in charges. North American customers can buy material via a charge to their bank accounts. It aggregates consumer micropurchases across merchants to enable a single processing of multiple transactions. This reduces processing costs, per-purchase credit card fees, and administration. Firstgate then remits money to merchants via checks or bank transfers.

Firstgate's Click & Buy now accepted in European iTunes Music Stores(C)1994-2005 M2 Communications Ltd. Apple has announced the launch of Firstgate's Click & Buy payment option for European iTunes Music Store customers, offering the ability to purchase music, audio books and gift certificates via debit card, direct debits, invoice or bank transfer. In addition, the company has launched its affiliate programme across Europe.

b) Payloadz

PayLoadz works with about 1,000 merchants and generates about $3 million per year in revenue. Rather than having prepaid accounts with PayLoadz, users pay sellers directly through PayPal, which also verifies that the buyers have enough money in their accounts to make the purchase. Merchants pay PayLoadz a flat monthly fee based on their sales levels, rather than a percentage of each transaction.

PayLoadz delivers files via a secure server to the customer using PayPal’s Instant Payment Notification system, which lets vendors integrate PayPal with their back-end operations. Buyers never see a PayLoadz interface. The payloadz system consists of an application server that hosts the website and handles transaction processing, a file storage, delivery server and a database server. Separating the componets into servers tuned for specific roles improves performance and reliability.

c) Paystone technologies
Customers in North America, Australia, New Zealand and parts of Europe can access Web content after setting up prepaid Paystone accounts by mailing funds directly to the company using their bank’s bill payment service or by depositing cash at any Bank of America branch. Merchants that sell content via Paystone create links to the e-micro-payment system. Customers follow the links, enter their Paystone password, and are redirected back to the content they want to purchase. For security, Paystone uses 128-bit SSL encryption.


d) Peppercoin
Massachusetts Institute of Technology cryptography expert Ron Rivest and fellow MIT computer scientist Silvio Micali founded Peppercoin. Buyers at participating Web sites who want to use Peppercoin see the e-micropayment technology’s interface, which looks like a common credit card interface, noted Bob Nix, the company’s vice president of engineering. The application’s new version, Peppercoin 2.0, doesnot require pre-enrollment or predeposit of funds. Consumers just enter their credit or debit card information with the merchant online as usual, and Peppercoin processes the transaction. The application uses a universal aggregation technique to efficiently process many small interactions between multiple consumers and merchants as a few large transactions.


The company uses RSA BSAFE software to provide encryption and digital signing capabilities for the security of a buyer’s information and the transaction’s integrity. Digital signatures can authenticate a message’s sender’s identity and verify that no one has altered the original content. To reduce overhead on small transactions, Peppercoin uses an online self-service customer-service module.

e) Digicash
DigiCash Inc. was a pioneering electronic currency corporation founded by David Chaum in 1990. DigiCash transactions were unique in that they were anonymous due to a number cryptographic protocols developed by its founder. DigiCash declared bankruptcy in 1998, and subsequently sold its assets to eCash Technologies, another digital currency company, which was acquired by InfoSpace on Feb. 19, 2002.

Digicash’s mission is to create a new personalized dimension to the shopping experience. We transform online incentives into powerful new tools, establishing a strong, high-value connection between consumers and ecommerce companies. The Digicash Wallet, our first product, gives merchants a revolutionary new approach for initiating real-time, value-creating coupons and promotions to increase sales, margins, and customer loyalty.Consumers are embracing the Digicash Wallet because it’s fun, easy, convenient and personalized to their shopping needs. Capture the benefit of rising coupon usage without sacrificing profits!

Hope that online payment makes our lives easier and more fun!