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Electronic Purses and Debit Cards

Electronic Purses and Debit Cards 

Electronic Purses and Debit Cards

Despite their increasing flexibility,relationship-based cards are credit based and settlement occurs at the end of the billing cycle.The remains a need for financial instruments to replace cash.To meet this need;bank,credit card companies ,and even government institutions are racing to introduce"electronic purses",wallet-sized smart card embedded with programmable microchips that store sum of money for people to use instead of cash.


The electronic purse work in the following manner: After the purse is loaded  with money,at an ATM or through the use of an inexpensive special telephone ,it can be used to pay for,say ,candy in a vending machine equipped with a card reader .The vending machine need only verify that a card is authentic and there is enough money available for a chocolate bar.In one second ,the value of the purchase is deducted from the balance on the card and added to an e-cash box in the vending machine.The remaining balance on the card is displayed by the vending machine or can be checked at an ATM or with a balance -reading when the balance on an electronic purse is depleted,the purse can be recharged with more money.