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I majored in e-commerce and went to school I just finished my defense last week, and my supervisor gave me a good grade for this paper.

The development of electronic money and its application in e-commerce

Abstract: With the development of network technology, electronic money as a network-based payment and settlement tool is developing at an unprecedented speed. Starting from the concept of electronic currency, the article not only analyzes its development, but also focuses on its application in e-commerce based on the business process of e-commerce. Finally, problems and solutions that arise during the application process are proposed.

Keywords: Electronic money, Internet finance, e-commerce

With the development of computer technology, there are more and more electronic payment tools related to e-commerce. These payment tools can be roughly divided into three categories: one is electronic money, such as electronic cash, electronic wallets, etc.; the other is electronic credit cards, including smart cards, debit cards, phone cards, etc.; and the other is electronic checks. , such as electronic checks, electronic transfers (EFT), electronic transfers, etc. This article will analyze and research the applicability of electronic money, one of the tools of electronic payment, in e-commerce.

1. Basic concepts and main forms of electronic money

1. Basic concepts of electronic money.

As the latest form of currency, electronic currency has been used more and more widely since its emergence in the 1970s. Electronic money is a kind of credit currency developed on the Internet, using commercial electronic machines and various transaction cards as the medium, using electronic computer technology and modern communication technology as the means, and using electronic pulses for fund transmission and storage. Financial electronic information exchange through online banking, electronic money has the advantages of low storage cost, low circulation cost, low standardization cost, and low use cost compared with other forms of currency such as banknotes. Especially suitable for small amount online purchases. Electronic currency technology solves technical problems in the storage, circulation, and use of intangible currency and has great potential for development. Mark Twain Bank in the United States was the first bank in the United States to provide electronic money services. As early as April 1996, it acquired 10,000 electronic money customers.

2 The main forms of electronic money.

Electronic money comes in two main forms: payment cards in the form of smart cards and digital currency documents. The former is mainly used for offline payment, and the latter is used for online payment.

Electronic cash is mainly used to replace banknotes and coins for daily small consumption. In addition to having the characteristics of cash, the Mondex card also has a better characteristic than cash, that is, it can be used as a person-to-person, person-to-merchant, and person-to-bank payment safely through electronic channels (such as telephone, Internet, etc.) Long distance transfer value. my country's e-commerce is just getting started, there are few online financial services, and the construction of electronic money systems is progressing slowly. Mondex is currently the closest electronic currency to cash.

E-Cash is a digital currency developed by Digicash for online transactions. It is a currency that circulates in the form of data. Convert cash values ??into a series of encrypted serial numbers, and use these serial numbers to represent the currency values ??of various amounts in reality. After users open an account at a bank that conducts electronic cash business and deposit money in the account, they can make purchases at stores that accept electronic cash.

2. Development of electronic money

1. Overview of the development of electronic money.

The emergence of electronic currency is the result of economic and technological development to a certain extent. The use of electronic money can, first, replace the issuance of cash to the greatest extent, reducing the cost of currency issuance; second, the issuing entity will change from the central bank to other entities.

Currently, there are two main types of electronic money: bank cards and online electronic money. Now, bank cards have been more commonly used in people's lives.

For customers, using bank cards for shopping, payment, cash withdrawal, deposit and transfer is convenient, fast, safe and efficient, and they can also get the convenience of consultation and financing. At the same time, online financial services driven by online electronic money are developing rapidly in the world. According to statistics, online financial services accounted for 10 to 20% of traditional financial services in 2004. Among them, online financial services in the United States have developed the fastest, and European countries are also developing vigorously. In Asia, Singapore and other countries are advanced regions in the development of electronic money. Officials of the Singapore Monetary Board said that the country will strive to switch to electronic currency in 2008. The currency will include an "electronic digital pulse" with a transmitting device installed on a mobile phone, PDA or even a watch, and then transmit the pulse signal for payment. event, by which time all businesses and service institutions will accept electronic money in accordance with the law. The European Central Bank also pointed out that the application scope of electronic currency will become wider and wider, and the promotion of electronic currency will become an integral part of the European Central Bank's future monetary policy.

2. The development of electronic money in my country.

Generally speaking, the development of electronic money in my country started later than developed countries and is still in its infancy. There are few online financial services and the construction of electronic money systems is progressing slowly. Due to national conditions and the concept of credit, there was no market basis in the early development of China's commodity economy. It was not until the mid-to-late 1990s that, with the deepening of financial system reform and banks being pushed into the market, the survival competition consciousness of the commodity economy forced China's The banking industry has begun to think about the development strategy of electronic money.

In our country, the current focus of development is still mainly on the credit card business. my country's first bank credit card was the "Bank of China Card" issued by Bank of China Zhuhai Branch in June 1985. Compared with foreign countries, the development history of bank credit cards is very short. In recent years, my country's bank card business has developed rapidly. By the end of June 2001, 55 financial institutions across the country had launched bank card business, with a total of 330 million cards issued; the balance of bank card account deposits was 374.2 billion yuan, only In the first half of 2003, the total transaction volume reached 4,853.2 billion yuan, an increase of 2.24% over the same period of the previous year; there were 129,000 bank outlets nationwide accepting bank cards and about 100,000 merchants; various financial institutions have installed automatic teller machines 4 . 90,000 units and 334,000 sales terminals.

3. The development trend of electronic money.

At present, the development of electronic money is very rapid. According to expert predictions, 12 to 15 transactions in the United States may be conducted electronically in the past ten years, and this development trend will continue to accelerate. In 2000, approximately 10% of people used electronic money for commercial transactions. In our country, some people in the industry also analyze that e-commerce will develop vigorously. It can be seen that electronic money will develop in a more convenient, safer, and more standardized direction, and payment methods will also tend to be simplified and unified. Electronic money will inevitably have broader development prospects.

3. Application of electronic money in e-commerce

In the face of the digital era that has arrived, with the rapid development of financial electronics and the Internet, the Internet as a new trade The field is gradually becoming a major development trend in business. The electronic money system is the foundation of e-commerce activities. Only by correctly understanding the advantages of electronic money and establishing and improving the electronic money system can e-commerce activities be truly carried out.

1 A brief description of the e-commerce process.

E-commerce is a method of buying and selling that uses the most advanced information technology. The entire e-commerce process is not a replica of business activities in the industrial economy stage. E-commerce is a business service that integrates three basic services: "communication services", "data management services" and "security services". In the process of e-commerce, consumers and merchants (i.e. buyers and sellers) input their various supply and demand wishes into the e-commerce network in a certain format, and the e-commerce network will search for relevant information and provide it to consumers based on the consumer's requirements. A variety of buying and selling options. Once the consumer confirms, the e-commerce will assist in completing the entire set of business including contract signing, classification, delivery and payment collection.

At the same time, in order to ensure the security of the transaction process, certification agencies authenticate buyers and sellers trading on the Internet to confirm their true identities. E-commerce essentially forms a virtual market exchange place.

2. Electronic money and e-commerce.

There is a very close relationship between electronic currency and e-commerce. In e-commerce, online banking, online electronic payment, data encryption, electronic signature, etc. all play an important and indispensable role. Among them, the depth and breadth of the application of electronic money as a payment tool directly affects the development of e-commerce. We can see from the process of e-commerce that e-commerce not only includes commodity flow, information flow, and logistics, but also covers the scope of capital flow. In the payment process, it is inevitable to make currency payments or fund transfers through the Internet. Electronic money can be used to safely and flexibly store currency on one's own hard drive in an anonymous form and use it during the payment process. It connects consumers and merchants (buyers and sellers) with banks. Consumers can open accounts at relevant banks. When they need to use electronic money, they can install corresponding software or deposit cash in advance, but consumers must negotiate with merchants. After signing the order contract, you can use the corresponding electronic currency to pay for the purchased goods. The certification body ensures the security of the transaction process.

3. Problems and solutions that arise in the application.

The application and development of electronic money makes spot and cash transactions possible on the Internet, promoting the innovation of corporate marketing structures, marketing methods, and settlement methods; and convenient, fast, and easy shopping methods will also greatly Global consumption and expanding demand have brought unlimited business opportunities to retailers; at the same time, due to the implementation of open network operations, market competition has been greatly intensified, prompting companies to provide the market with high-quality and low-cost goods and high-quality and efficient services.

In e-commerce, using electronic money for payment has many advantages over traditional currency payment methods. First of all, in the same space, the denomination value that can be stored in electronic currency is unlimited; while the denomination value of traditional currency is limited. Secondly, electronic currency is relatively less restricted by time and space and can be transmitted over long distances in a short time through communication systems. Third, electronic money can be managed by computers, which makes up for the high cost of traditional currency management. Fourth, the anonymity of electronic currency is stronger than traditional currency, avoiding face-to-face transactions. In addition, the author also believes that electronic currency has the advantage of larger information carrying capacity compared with traditional currency. By using electronic money in the transaction process, merchants, manufacturers and consumers can obtain more information than traditional transaction methods. For example, merchants can quickly and timely count the sales of hot-selling products on the Internet, accurately see the user profiles who participated in browsing or purchasing through user registration information, and can even conduct subsequent market surveys by phone or email. , in order to provide more convenient services. At the same time, consumers can also get quick feedback information and complete after-sales service.

However, for now, there are still some shortcomings in the application of electronic currency as a payment tool in e-commerce. There are many opinions prevailing on this issue. For example, security issues, imperfect network infrastructure, immature development of e-commerce, system reliability, security and digital authentication technology, etc. The emergence of these problems will have a great impact on the development of electronic currency. . In order for electronic currency to develop rapidly and healthily, these problems must be solved as soon as possible. It is not only necessary to strengthen the construction of network infrastructure and increase the penetration rate of the Internet; at the same time, it is necessary to actively develop e-commerce, thereby promoting the development of electronic money; in addition, it is also necessary to introduce and improve corresponding laws and regulations as soon as possible to provide corresponding support for network security. Legal protection, standardization of online transaction procedures, and correct use of digital certificates.

In addition, through the study of electronic currency, the author believes that the emergence and application of electronic currency poses new challenges to traditional value economics and monetary banking.

In future development, due to the application of electronic money, the central bank will no longer be able to regulate the market economy by adjusting the issuance of currency. New value economics and monetary banking will emerge, and inflation and deflation will also occur. There will be new interpretations to adapt to the development of the future network economy. Electronic currency will form a new discipline and impact traditional theories and concepts in the economic and financial circles.

4. Conclusion

Expanding the electronic currency business is an inevitable requirement for economic development. With the accelerating economic globalization and the rapid development of information technology, the electronicization of the monetary and financial system will be an inevitable trend. At present, the continuous rise of electronic commerce, e-commerce, various online shopping systems based on secure data exchange protocols, supply chain management, and online marketing related to information technology have made the original computer application system, management system, and trade system structure It can no longer keep up with the development and needs of the times. It is believed that in the near future, driven by the continuous development of e-commerce, electronic currency will also develop more comprehensively in social and economic life.

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