Other eCurrencies

eCurrencies seem to come and go. Currently there are systems such as PayPal, NetPay,
WebMoney and EZCMoney to name just a few. Doubtless there are many others and who knows
what the future holds. The purpose of each is the same of course. To provide a secure efficient
speedy method of transporting value from one person or business to another. Some do it better
than others do. Some don’t.
Many merchants accept eCurrencies as well as the traditional transactional mediums. Some of
these are good in that they may offer a sort of guarantee in the case of fraud. Not all do however
and one should study the terms and condition of those he or she proposes to accept. Bear in mind
it is a form of third party payment and as such subject to the same fraudulent problems as third
party cheques. PayPal, for example, tends to hold the merchant responsible for fraudulent funds
going through its accounts and has a track record of freezing merchant’s accounts without notice,
tying up the merchant’s PayPal account and the funds in it. Then extracting the funds they
consider fraudulently obtained. This can happen well after the event and the ‘customer’ has long
gone. The merchant has little come back in this situation. An exchange provider recently ran a
pilot using PayPal for a while and found that during that time 50% of the orders he received were
fraudulent. So be wary of using third party arrangements. I do not say don’t use them. Just be
aware of what is involved and the potential risks
Some years back the New York Times ran a story on Flooz.com, a past purveyor of online
currency using electronic gift certificates (the company is now defunct). They had come to a dead
stop apparently due to being defrauded of about $300,000 US dollars from scammers in Eastern
Europe and Russia who have a stolen credit card fraud system well set up and operating. To show
how large this operating was the company sold $25 million USD dollars of Flooz currency in
2000. There have, over the years, been a number of proposed alternatives to online credit card
transactions some of which have, like Flooz, fallen by the way side and some have achieved a
modicum of success.
Such systems, like any other, invite the criminals who see it as an excellent way to whitewash
their ill-gotten gains and it is quite likely used as such on occasion. However that applies to all
types of transactions and some of the biggest banks in the world have been embarrassed to find
themselves ‘doing the laundry’ so to speak.