Monetary Transactions in E-commerce Using Smart Cards

For years now, there has been a lot of excitement about using digital cash for purchases of goods and services. In fact, studies in Briton indicate that two out of every three individuals would rather carry one card for every purchase as opposed to carrying cash (9). Additionally, there is tremendous interest in using digital cash for purchases via the World Wide Web instead of other common traditional payment methods such as checks, debit cards, and credit cards. This paper investigates the use of smart cards as a form of digital cash. Specifically, issues related to functionality, security, and competition are examined. The paper concludes with a look at the application potential of smart cards for e-commerce.