Glamor Economics

Chapter 120

Chapter 15 Section 11 Future Financial Masters——Electronic Finance

The earliest bank credit card in the world was a credit card issued by the Flatbush National Bank of the United States for travel in 1946. However, this credit card can only be used for currency payment and cannot provide consumer credit, so it is not a bank credit card in the true sense.The real bank credit card is the credit card issued by the Franklin National Bank of the United States in 1952. Following the Franklin National Bank, Bank of America began to issue Bank of America credit cards in 1958, and absorbed small and medium-sized banks to participate in the joint venture, developing into today's Visa group.Western state banks formed the United Bank Association, which issued the MasterCard credit card in 1966.Visa Group and MasterCard Group have gradually developed into the two largest international credit card organizations in the world today.

With the development of China's economy and financial industry, electronic finance is no stranger to Chinese people.E-finance refers to the activities of financial intermediation through electronic means, such as online banking and electronic settlement.

With the development of electronic finance, electronic money has become a new concept in economics.At present, the international definition of electronic money is still inconclusive.Moreover, the experimental projects related to electronic currency implemented by various countries in the world are also in different forms.There are three common definitions:
1.Electronic money is based on the financial electronic network, with commercial electronic equipment and various transaction cards as the medium, with electronic computer technology and communication technology as the means, and stored in the computer system of the bank in the form of electronic data (binary data). A currency that realizes circulation and payment functions in the form of electronic information transmission through a computer network system.

2.A certain amount of cash or deposit is exchanged from the issuer and data representing the same amount is obtained, and by using some electronic method to transfer the data directly to the payment object, so that the debt can be paid off, the data itself can be called electronic money .

3.Electronic currency means that consumers pay traditional currency to the issuer of electronic currency, and the issuer stores the equivalent value of these traditional currencies in electronic or magnetic forms in electronic devices held by consumers.According to the definition of the Bank for International Settlements, it refers to the monetary value stored in electronic form in electronic devices held by consumers and calculated in current currency units.

Through these three definitions, we can see that electronic currency realizes its currency function by means of network media, which is the basis of the development of e-commerce.In modern e-commerce, banks play a vital role as the link connecting production enterprises, commercial enterprises and consumers. Whether banks can effectively realize electronic payment has become the key to the success or failure of e-commerce.

A simple online transaction process is as follows: first, the buyer sends a shopping request to the seller; the seller sends the buyer's payment instruction to the seller's acquiring bank through the payment gateway; the acquiring bank obtains an authorization from the issuing bank through the bank card network, and sends the authorized The information is sent back to the seller through the payment gateway; after the seller obtains the authorization, it sends a shopping completion message to the buyer.If the payment acquisition and payment authorization cannot be completed at the same time, the seller will also send a payment acquisition request to the acquiring bank through the payment gateway, and transfer the funds of the transaction from the buyer to the seller's account.The final inter-bank settlement is completed between banks through the payment system.

From the above transaction process, it is not difficult to find that online transactions can be divided into two parts: the transaction link and the payment and settlement link. The payment and settlement link is composed of a professional financial network including payment gateways, issuing banks and card issuing banks.Therefore, without the bank, it is impossible to complete the payment of online transactions, so it is impossible to talk about real e-commerce.We can understand this more intuitively through the figure below.In the figure, with the help of the network platform, through the electronic currency issuer A, the transfer of data flow from electronic currency user X to Y is completed, and then the transfer of cash flow and deposit flow from X to Y is realized.

With the great popularity of the Internet, the status of the Internet in the securities market is becoming more and more important, which is also a major development in recent years.Now that initial public offerings are conducted online, many brokerage firms allow clients to trade securities online and send buy and sell orders by e-mail. In June 1999, Merrill Lynch shocked Wall Street by offering its 6 million customers online transactions with a minimum transaction amount of $500.Now, online transactions are very common.The brokerage business has changed dramatically from the past.

Compared with western countries, my country's financial electronicization started relatively late, but it has made rapid progress in the construction of financial electronic construction, and fundamental changes have taken place in financial communication networks and financial business processing. The financial system has played an important role in strengthening financial macro-control, preventing and defusing financial risks, accelerating capital turnover, reducing operating costs and improving the quality of financial services, which has promoted the rapid, healthy and stable development of my country's national economy and finance.

However, despite the rapid development of electronic finance, some defects still cannot be ignored.For example, there is a lack of strategic planning for financial electronicization, many difficulties in the construction of a national payment and settlement system, the slow pace of construction of certification centers for online financial companies, and the level of financial information security construction still lags behind the electronic level to a large extent. It needs to be continuously perfected and improved in the future development process.

[links to related words]

Electronic money refers to exchanging a certain amount of cash or deposits from the issuer and obtaining data representing the same amount, and by using some electronic method to transfer the data directly to the payment object, so that the debt can be paid off.

E-commerce refers to a wide range of commercial and trade activities around the world, under the open network environment of the Internet, based on browsers and server applications, buyers and sellers conduct various business and trade activities without meeting each other, and realize online shopping for consumers and merchants. A new type of business operation model for online transactions and online electronic payments, as well as various business activities, transaction activities, financial activities and related comprehensive service activities.

Stored value card refers to an IC card or magnetic card issued by a certain industry or company that can replace cash.

A credit certificate issued by a credit card bank or a special issuing company to consumers. It is a business that integrates the two basic functions of payment and credit.Its characteristic is that it has two functions of credit and payment at the same time.

E-wallet is a payment tool commonly used by online shopping customers in e-commerce activities.

Electronic check is an electronic payment method whose main feature is to complete the settlement by safely moving the deposit through the computer communication network.Whether an individual or a business, the party with the debt issues a check or other instrument and hands it over to the party with the creditor's right to settle the debt. When the agreed date arrives, the bearer submits the original of the instrument to the payer and you can receive it to cash.

Electronic cash is an encrypted serial number representing cash, which can be used to represent the currency value of various amounts in reality.As the paper-based economy transitions to a digital one, e-cash will become mainstream.

(End of this chapter)