ELECTRONIC CASH AND SMART CARDSIntroductionWhen you enter a shop to make a purchase, a monetary transaction takes place between a merchant, the supplier and the consumer, who is you. Typically you would use cash, check, or credit card. If you're making a purchase under five dollars it doesn't seem reasonable to pay by credit card or write a check. Electronic cash is the solution to this problem, no matter how large or small the transaction. Electronic cash is a valid alternative to traditional payment methods. What is electronic cash? In the past, people had to go to banks and queue to deposit or withdraw money from their accounts. Nowadays, money is accessible with the help of a computer. The monetary value of your bank balance is available electronically through your bank's computer. The electronic form of money defines what is called electronic cash. This increases your purchasing power because your funds are available 24/7, all year round. What is a Smart Card? The Smart Card is a plastic card equivalent in size to a credit card that contains an embedded chip on which digital information is stored about how much money your card or account holds. The chip stores this information and updates it along with every transaction made with this card. The process to use is to swipe your card to pay for a purchase and the swiper deducts the purchase amount from the amount stored on the chip. Some debit cards are implemented the same way as smart cards. Executive Summary An electronic system, a new form of payment that benefits society as a whole through smart cards. It creates less need to have physical cash and maintains the ability and use of the same cards... in the middle of paper... users would not be able to access medical records, driving records or any other information that would present on the card. The downside for merchants would be that they would have to invest in smart card-compatible terminals. This would lead to increased employee training costs, and most merchants have decided not to move forward with adopting smart card support unless there is demand. There have been many obstacles to overcome with the use of smart cards, such as deposit insurance liability, data accuracy, transaction anonymity, fraud risk. Java software from software company Sun Microsystems removes or reduces many of the problems found with smart card implementation. Java is now the standardized company used because it offers many advantages in terms of security and network awareness. Java has become the largest developer of smart card applications.