No. 1: Electronic Transactions
Wouldn't it be great - a world where money existed only electronicly, no coins, no notes, no cheques, just a small credit card containing your extensive wealth on a magnetic strip. Goods would be bought via the internet, an interactive supermarket where goods are bought and delivered without leaving the comfort of your living room.Unfortunately, it isn't always that simple, and this month, I explore the pontential of electronic transactions (ET).
Advantages
So whats the great idea behind this computer currency anyway? Well its more efficent for a start. Instead of several different coins and notes, your money is stored electronicly on a bank's computer, and you could use just one card to access it. You save time searching for correct change etc. and using electronic methods cuts this problem out.Another use for this is the ideal world I just spoke about. You could purchase goods via the internet, and that means you could buy praticaly anything, and have it delivered to your door. No more trips down to the local supermarket!
Yet another pratical reason is that if you pay with a credit card, you reduce the risk of being robbed. Carrying large ammounts of cash around could be risky, but a harmless plastic card could eaily be replaced without loss. Simple things, like not having to queue to get your money from a bank and being able to be flexible with how you pay makes ET more desireable. Also the advantages for shops themselves for being payed with a credit card would be enormous, they can use it for a form of data capture, they would know who bought the goods, what they bought etc. This way they know what goods they have on their own shelves, and when to replace them.
In short, ET is more effiecent by far, there is no paperwork involved, just swipe the card and everyones happy.
But if ET is so amazing, then why don't we have it?
Modern banks now offer limited ET services. Visit citibank now!
Disadvantages
There are several reasons why ET has not revolutionized the world.One, initial cost. You have to assume that everyone has a computer to use the services like internet ordering etc.
Two, most credit card services slap on extra for using the service, and for small transactions, this isn't pratical.
Three, Computer error and security - Whats to stop a hacker from busting into a bank computer and messing everything up? Whats the chance that a computer would miscalculate and send an extra million into my account?
How am I supposed to keep track of what I have spent? Because ET is not concrete, just some 1's and 0's in a computer, It be easy to overspend and go into debt.
There are more reasons too. Take for example a person knocking on doors raising money for charity. If there was no cash, then he would not be able to accept money from you, instead you would have to goto a bank or a website to dontate money, and for some people, this isn't worth the bother.
If ordering goods over the internet was commonplace, then almost certainly this would spell out doom for smaller shops and buissness who cannot afford the computers. They wouldn't be able to compete and would go bankrupt. Plus the fact that people wouldn't need to go out to buy things, this would have an impact on social life.
The real factor that keeps back ET from replacing cash is risk. By putting all your money on a computer you risk hackers, crashes, anything. If you lost this data, your identity is lost. You'll have no money, and a good record of your identity would be lost too.
Weighing up the scales
To make it clearer, I have listed all the points for and against ET.|
|
|
||
|
ET is more efficent for large transactions |
|
ET is not pratical for small transactions |
|
|
ET protects you from theft |
|
ET is open to hackers and computer error |
|
|
ET could be used on the Internet |
|
ET on the internet would cause small buissnesses problems |
|
|
ET would help shops in data capture |
|
Shops already use electronic data caputre methods without ET |
|
|
ET is faster |
|
ET is not always faster than cash |
|
|
ET would allow you to be flexible in payment plans |
|
It would be easy to go into debt with ET |
Conclusion
ET is a great idea. The vision of a world powered by computers and buying things via the internet is a powerful one. However, in practice, it is flawed. To what extent can we trust a computer? Storing this data on a computer only to be incorrect, tampered with or lost would be a disaster.ET is a great idea.
But so is communism, alchemy and painting yourself green so if aliens attack they think you're on their side...