The launch of electronic money allows greater convenience when purchasing, both online and off.

Some service providers have made electronic money available in the form of cash cards, electronic wallets, and mobile payments. The Bank of Thailand, which oversees electronic-payment transactions, has approved seven such service providers.

The two major providers that have launched cash cards are One Plus Group and OK Cash-Digital Money.

One Plus Group consists of seven business partners: 7-Eleven, Counter Service, True Corp, Unilever, UBC, BTS, and RS Promotion. OK Cash has a digital money system provided by Payment Solution, a subsidiary of Capital OK.

Thanin Angsuwarangsri, general manger of Payment Solution, said the company has developed a cash card to allow people to experience the new style of using money, instead of carrying bank-notes and coins. With reward point services, adopting cash cards allows people to use their money in the same way but with the offer of value-added services on top.

The OK Cash cash card tracks what consumers are buying and their purchasing behaviour, allowing companies to develop customer relationship and loyalty programmes for their clients.

The company does not only issue cash cards in its OK Cash brand but also provides cash card products including system design, cards and technical development, implementation, and maintenance for issuers such as theatres, shopping centres, or restaurants.

"Our strength is in easy implementation as we connect card reader terminals using a GPRS network instead of a wire network, which means card acceptors can be movable and therefore easier to implement," said Thanin.

Thanin added that a cash card allows greater flexibility, as along with financial transactions it also enables customers to make money transfers and store money on their cards. "More than 250,000 shops accept OK Cash. We have already issued around 100,000 cash cards over last few months. An average of Bt600 to Bt700 is used per card per month," he said.

There are two types of cash card: identified and non-identified. An identified card contains information revealing the identity of the person who originally withdrew the money from the bank. Also, in much the same manner as credit cards, identified electronic money enables the bank to track the money as it moves through the economy. A non-identified cash card works just like paper cash. Once anonymous electronic money is withdrawn from an account, it can be spent or given away without leaving a trail.

"Identified cards can store up to Bt100,000 in digital money as opposed to Bt25,000 only on non-identified cards," said Thanin.

One Plus Group has launched a cash card called "Smart Purse" which has both  contact and contactless interfaces to store digital money of up to Bt10,000.

More than one million cash cards are expected to be issued this year, three million by next year and up to five million by 2008. This year there are expected to be 10,000 places where cards will be accepted, climbing to 25,000 next year and 35,000 for 2008. There are now 10,000 payment points among 60 partners that accept cash cards, such as cinema chains, fast food chains and bookstore chains.

Cash cards come with loyalty programmes and customer relationship management (CRM) which allow people using cash to accept points and rewards in the same way as using a credit card.

The cards are expected to generate at least Bt500 million of transactions in the first year. Since the month-long trial launch, around 98 per cent of cash cards sold have been used for an average of Bt148 per transaction.

Supachai Cheravanont, president and CEO of True Corp, a member of One Plus Group, said that the beauty of the cash card is the cash and credit functionality in one card that allows more choices for payment. He added that in the first stage One Plus's card comes only with the cash function but in the future the card will function as a credit card as well as an ATM card.

"It's win-win," he said. "People and customers win as they can collect points from their payment while providers win as they will know who their customers are and can therefore design privileges for themthrough loyalty programmes."

Apart from digital money in the form of a cash card, another aspect of electronic money is the electronic wallet, which works as money stored on the Internet.

Somwang Laungphaiboonsri, general manager of PaySBuy, an Internet electronic-wallet provider, said the company provides a virtual bank account over the Internet to allow people to pay for online purchases securely instead of using credit cards. It also makes life easier for people who do not have credit cards.

The concept is to allow people to open a PaySbuy account, which acts as a wallet on the Internet. They can transfer money from their bank accounts or from their credit card to store in PaySBbuy.

Instead of using credit cards to pay for any online purchasing, the system, encrypted with SSL 128 bits, is more secure.

"There are several major shopping sites that accept PaySBuy's wallet including Thai2hand.com, Pantipmarket.com, Sanook.com, Marketathome.com and Taladebid.com. At these sites, as many as 1,000 online shops accept PaySBuy's electronic wallet," said Somwang. He added that in the near future PaySBuy will launch a mobile version that will be equipped with an SMS alert system for when the wallet needs to be refilled.

A major change in the nature of money could have significant unintended consequences. The challenge is how people manage to maximise the benefits to society while reducing the risks.

asina@nationgroup.com

Asina Pornwasin

The Nation