Why use an electronic purse?

The development of electronic purses has been driven by commercial and technological organisations rather than by demand from consumers.

The organisations operating electronic purse systems gain from the use of the money stored on the cards. For banks, there are advantages in reducing the handling of cash and cheques which have to be transported securely and are labour intensive to handle. Electronic purses are also seen as a means to protect the bank and card holder relationship which is perceived to be important in today's competitive environment.

For the retailer, the advantages are the reduction in handling of currency and cheques. This includes reducing the delay in money being credited to the retailer's bank account. Another advantage is reducing the risk of theft.

The electronic purse operators outline the following advantages to the consumer:

Ease of use.

Withdraw or deposit value by telephone.
Pay the exact amount, no fiddling for change.
No authorisation or signature.
Immediate payment.
In the future, access points may include mobile phones.

Transfer value by telephone.
Pay person to person.
For low or high values.
Multi-currency capability.
No age limit, so suitable for all the family.

Accessibility and convenience.

Cash machines and telephones give more access points to funds in bank account.
Available 24 hours / 365 days.
Cash machines and telephones cannot run out of electronic cash.

Safety and control.

Spend only what you have.
Read your balance.
Load value at home.
Lock your card or wallet.
Keep track of what you have spent and where.
Customer is traceable if a lost card is found.

However, consumers may be reluctant to pay to use an electronic purse unless they perceive very significant advantages.

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