As seen in...

E-commerce  hampered by

outdated payment system
By George Matyjewicz, PhD, Chief Global Strategist, GAP Enterprises, LLC

E-commerce is largely limited to the U.S.A., Great Britain, and Europe, with most e-commerce sites dedicated to doing business within the U.S.A. Asia is growing fast, in particular with business-to-business (B2B) transactions.

While most experts say that e-commerce is being hampered by security issues, in my humble opinion, it is really hampered by an inefficient and outdated payment system. Card-based payment was a concept that was designed for face-to-face commerce, where a consumer’s credit card was used to imprint on a receipt to represent the presence of the consumer in a store. However, e-commerce does not work like this. The customer is never present at a store. The merchant does not handle the card. Online authorization mechanisms are not in reality ‘real time’ in most cases.

How does a manufacturer in Australia sell to a distributor in the U.S.? There is no such thing as a worldwide bank. The banking system is outdated, and cumbersome. Businesses involved in B2B commerce must use wire transfers, Letters of Credit (LC) or Guaranteed Insurance Contracts as defined by the International Chamber of Commerce. All are cumbersome, inefficient and expensive.
 

Global Currency
“A global economy requires a global currency” said Paul Volcker, Former Chairman Federal Reserve. Simply put, the World Wide Web demands worldwide money.

A simpler method of payment would be to automatically transfer funds from your account to your supplier, done online. It needs to be secure and both parties need to know the funds are safe.

Enter private digital currency (PDC) which encompasses several different brands of electronic money. Essentially, PDC allows consumers to pay for goods or services without the merchant having to set up an account for credit card payments. Some forms of PDC, such as PayPal, are simply online bank accounts, which allow consumers to email money to other consumers. On the other hand, E-gold, which has been carving out a niche of its own, is a digital currency that is “gold itself, circulated electronically.” As such, e-gold is an ideal currency for worldwide e-commerce trade.

Need For Rules
PDCs will work in the business world if the parties involved can determine the rules of exchange. For example, the retailer could specify that the merchandise will be inspected by the consumer before the retailer is paid.

Once the consumer has examined the merchandise and found it acceptable, he or she would then notify the PDC operator, and the PDC operator would see that the merchant was paid. If the merchandise was deemed unacceptable, the money would not be refunded to the customer until the merchandise was returned. This is the same protection that is afforded to companies when they use letters of credit for foreign purchases. While credit cards assure the merchant that the consumer can pay, they really protect the consumer, which is a real problem when one is selling “electronic intellectual property” (software or documents written and downloaded to a consumer’s machine) or selling to someone in another country.

E-Gold
Two companies have emerged that together could create the next global monetary system. Gold and Silver Reserve (G&SR), based in Melbourne, Florida, has created a currency called e-gold to enhance e-commerce transactions. E-gold is backed by gold bullion stored in London, Dubai and Zurich. E-gold’s value is determined by the weight of the metal, not by the value of the U.S. dollar or any other national currency. Weight units have a precise, internationally recognized definition. This means that a Canadian retailer can pay a German supplier or a Japanese consumer can pay an Australian retailer the correct weight of e-gold as easily as if the price had been quoted in his or her own national currency. All prices are quoted in currency, and the conversion is done seamlessly in the G&SRs back office.

International Payments
Another company, Global Pay Systems LLC and it's sister company Cash Cards International offers a global payment system with debit card that is being used by customers in 190 countries worldwide. The company's V-Cash is backed by U.S. Dollars or gold (e-Gold) and is specifically designed to enable global e-commerce. Holders of V-Cash are able to purchase goods and services globally, either online or at retail point of sale units using a debit card to draw upon their holdings of V-Cash, just as one might use a Visa or MasterCard debit card.

Simply put, gold is a new monetary system based on the gold standard. While gold is no longer the standard the U.S. dollar, it is the standard for Cash Cards and e-gold. Safety, security, efficiency, and speed — worldwide money for the World Wide Web!

B2B
Using the Global Pay Systems solution, a manufacturer in Australia can now sell products to a wholesaler in the U.S. and payment can be immediate. The wholesaler tells the manufacturer the they will purchase goods, and they will pay in V-Cash when the goods are ready. The manufacturer alerts the distributor that the goods are ready, and the distributor arranges for an inspection at the pier, either their own inspector or a contracted export facilitator. Once OK, the distributor goes online and transfers V-Cash to the manufacturer! Immediate and clear funds.

A true World Wide Currency for the World Wide Web!

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Web Resources
http://www.e-gold.com
http://www.globalpaysystems.net
http://www.cashcards.net