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transferring value (money) using the internet

Xavier (with advice from abelard)

disclaimer:

abelard.org takes no responsibility for any communications or transactions made with any of the organisations listed below, nor does abelard.org guarantee that the figures and other information given are accurate, complete, or up to date. Nor is this document to be read as any manner of advice or guarantee.

Caveat emptor (let the buyer beware).

Index

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why this document is revised

Since this document was first published in June 2002, the choices available for transferring value on the internet (usually currency or its equivalent) have both grown and evolved.

Then, there were few methods of value transfer that were convenient, secure and risk-free. this was one of the reasons why we suggested the use of a gold-backed digital currency.

The other reason for our recommendation was, and still is, that the value of gold-backed currency usually devalues less than does the fiat cash currencies held in bank accounts.

But now the choice of other relatively reliable value transfer methods on the Internet has widened. This document has been revised to reflect this change.

The other major change since 2002 is how the attack of 9/11 has altered financial communications and transactions.

the impact of 9/11 on financial transactions

Since this document was first written, the global war on terror and international criminality has engendered a much greater requirement for authentication of identity and bank account ownership, in order to extinguish the financing of terrorists and criminals.

Thus now, if you want to give instructions for transferring currency, whether by more traditional methods such as by fax, or through the internet, you must be willing to provide several, if not all, of the following: your name, land address, land-line telephone number, a permanent email address.

The value transfer organisation, whether a bank or and internet-based company, will make a positive check back with you that you are who you say you are, that your email is valid, and so on. This degree of intrusion into privacy must now be expected. Terrorists and criminals are unlikely to give honest information, and the only way to detect them is by checking.

However, this does not mean that it is reasonable to have to provide bank or credit card account details before you may even complete signing up with an electronic value transfer organisation. Nor would we be happy with requirements to provide social security or passport numbers on sign-up.

why not just use credit cards?

Well, of course you can, online information security/account verification has grown considerable in the last few years. However, we at abelard.org think that there are considerable advantages in using some of the new systems currently being developed for the online world. And anyway, you might like to keep up-to-date with developments.

Using credit cards on the internet has evolved. Large trading companies can qualify for merchant status and so provide secure logins, data storage and information handling of your personal details, including your credit card. Look for the closed padlock symbol in a bottom corner of your browser to check whether you are within a secure zone. ( If you use Firefox v1.0 PR, the url address window turns yellow on secure web pages.)

Small traders have neither the trade turnover nor the trading history to be able to obtain merchant status with a bank, and so qualify for credit card handling. This is only financially practicable for well-established businesses that can convince a merchant bank of their track record (even including having an earth-bound shop front), and who then pass on their merchant account costs to the buyer. Smaller organisms, therefore, find one or more internet value-transfer handlers who will provide, for a fee, secure credit card handling or some other means for their supporters and customers to transfer value (often, to pay money).

when credit cards cannot be used on-line

However, not many small traders are geared up to offer credit cards, and credit cards are not always an available, or possible, means for making a donation or a gift, or transferring funds to a friend or relation, or even to a bank account abroad.

Suppose you want to buy that second-hand book you found through AddAll.com? Supposing you want to give a donation to a charity, or a helpful and appreciative gift to those nice yaks at abelard.org?

How can you do it? Smaller web-sites generally can not qualify for merchant status and so do not provide credit card processing, the bookstore wants dollars and your bank account’s in euros, and the yaks live in the middle of a cold desert in Outer Mongolia with no postal address.

Well, you could obtain a banker’s cheque in dollars – which is equivalent to cash – and that costs dear, takes time and is fraught to send.

Or instead, you could buy a new type of currency designed to avoid the problems of foreign exchange and security/account verification, and designed to be used on the Internet – for example, a digitised gold-backed currency, or another form of electronic value transfer.

Credit card payment downsides

For the payer

You have to trust the vendor, who obtains your credit card details, to be honest. You have to trust routing through the Internet to and from that vendor to be secure .To ensure and guarantee that security, the vendor you deal with has to pay for the privilege.

It may well also mean you are using the credit card to pay in a different currency to that in your account. The credit card company, or the bank, will charge you handsomely for this ‘benefit’.

(You can use the calculator provided at http://www.e-gold.com/unsecure/cc.htm to see an approximation of how much credit card transactions cost vendors and, so, cost you.)

For the receiver (e.g. a vendor)

From the vendor’s point of view, they are at the mercy of users of credit cards who do not, in fact, have funds available, or because of cards being used fraudulently. The vendor has to pay for this by returning payments already received (even months earlier). This is called charge-back in the trade. This can happen even when the goods are not returned to the vendor.

The vendors also incur high overheads in financing and maintaining their ‘merchant status’, which for vendors is the ‘open-sesame’ to the world of credit-card transactions on the net. The high overheads include depositing a capital sum with the merchant bank as security (lazy assets), and paying various monthly charges over and above the transaction charges.

A vendor’s overheads will also include increased web-site hosting fees to pay for obtaining Secure Socket Layer (SSL) facilities. SSL capability is necessary to ensure a secure environment for the transfer from payer to receiver, over the Internet, of credit card and other details.

Other methods like NOCHEX, are either much more limited, or, like PayPal, are even more fraught than credit cards. For details click on the links.

Of course, you also always have to remember that transferring value using a credit card is only possible if the recipient is capable of receiving such a value transfer. You cannot give your great-niece, your boy-friend, a yak (currently in another part of the world) any money using your credit card – unless, of course, they are fully set up to take credit card payments as a vendor would be. However, value transfer systems such as e-gold and moneybookers are not restricted like this.

What is a digitised currency?

With many digital currencies, you are holding “cash” in your account – just like you would hold notes and coins in your wallet. As with cash, when you give it to someone else, they own it, unless they give it back or give it to someone else.

So, for these digital currencies, there is no reversibility of payment without the consent of the new owner.

What is digitised gold currency?

Electronic currency, backed by secured gold holdings.

The electrons that are stored in a server have a one-to-one relationship with something real like physical gold.

Why use digitised gold currency (dgc)?

Safer and more private – you do not have to provide credit card, bank account or other personal details, nor submit to credit checks to set up an e-gold account, nor send banker’s drafts or cashier’s cheques in foreign currencies when paying for an item abroad. Only you can access your e-gold account (unless you allow others to know your account passphrase).

Further, because dgc is generally based in “capital-friendly” jurisdictions with strict privacy laws, your personal and transaction details generally will not be sold, or released for government use. Client data may only released after a court order has been obtained in the country where the account is held.

Global– just like gold, dgc is an acceptable form of currency world-wide.

Reliable – dgc is backed by precious metals which cannot be debased or devalued. This is not true of fiat national currencies.

Easier and more fluent – no multitude of currency conversions needed as long as you trade at different sites on the net, just the conversion between your preferred currency and gold. Currency transaction costs are mostly a confidence trick – in the computer age, real costs are next to non-existent.

Faster – once you have a digital currency in your account; transfers to another similar account are practically immediate. Bank wires take 3 or more business days to clear within a country; internationally they can take up to two weeks to clear. Once they have been banked, cheques take a minimum of 3 working days to clear; and there will be a considerable longer delay if you order a banker’s draft in a foreign (to you) currency for you to send abroad. This is done so that the bank can hang onto your money for as long as possible. Then they can make interest on your money by lending it out during the delay.

Cheaper – once your account is loaded, the transaction charges are considerable lower – from 0.1% to 2%. Remember, transaction charges are generally paid by the recipient, the cost being handed on to the payer in higher prices.

Transaction charges for credit cards or PayPal-type systems range from 2.5% to 4.5%; and credit cards also have further costs for merchants. Currency transaction charges are, potentially, a further cost, if those trading are using different currencies.

Bank wires (SWIFT or Western Union) can cost between US$10 to US$70 (that is, UK£15 to UK£45) depending on your and the receiving banks’ charges (including exchange fees), and on the amount being sent.

You may not realise these costs exist because they are often paid by the trader. However, in those cases you will be paying for them through higher prices.

Advantages of digitised gold currencies to traders:

• Lower cost – Transaction costs are considerably lower, or non-existent. No additional web-hosting costs.
• Non-repudiation – Any payment made is final, the payer cannot reverse a payment once it is made, unlike with credit cards or (sometimes) with cheques.
• Honest while private – digital currencies are able to provide privacy to their users, whilst reducing the risk that that they are being used for money laundering. Provided that all the money coming into a digital currency account has gone through banks with anti-money laundering practices in place, then money laundering should be impossible. Furthermore, all of the digital currencies currently in business claim to be committed to discouraging crime and money laundering, while at the same time protecting the privacy of their account holders.

Note that some of these advantages: safer, easier and more fluent, faster (once money is transferred to your online account) and traders’s advantages, can also apply to evt systems such as moneybookers.

why use electronic value transfer (evt)?

As pointed out above, not all websites with whom you wish to do a transaction, nor many individuals, have the capability to handle credit cards on the internet. Thus other reliable methods of transferring value (usually currency) are necessary.

Unlike digitised gold currency, evt does not require you to convert your fiat currency into gold, by purchasing gold, or electronic gold, before you can make a value transfer.

Once you have set up an evt account, you choose with how much fiat currency you load your online account. You then access these funds when spending at participating websites, online commercial entities, or even sometimes by sending email instructions. The value transfer is completed through acceptance by the receiver, who also must be signed up with the same evt entity.

Warnings

• Because these systems act as debit cards, your online account is not allowed to become overdrawn. If you pay for an item while there are insufficient funds in your account, your bank or credit card account may be debited to make up the difference. There may also be a charge for doing this. Your online evt account can be frozen. It will be your responsibility to ensure that there are sufficient funds in your account to cover any transactions you may wish to make.
  
  
• If you are selling items, with a number of these evts, it is possible for the person paying you to change their minds and reverse their transaction. Of course, often this is reasonable, but there are those who buy goods and receive goods, and then reverse the transaction without returning the goods. With some evts, a chargeback can be made up to six months after the original sale, with the amount being deducted from a credit card or bank account if not available in the evt account. Worse for the seller, such chargebacks may also incur additional fees. For this reason, many sellers prefer to only use non-repudiable evts such as moneybookers.

What electronic value transfer systems are available?

As the internet, and its facilities expand, various evts are being developed. The list below is by no means exhaustive. A number of apparent evts have been excluded because they fail to provide background information such as terms and conditions of trade, and information about who they are are. We at abelard.org have investigated the following entities, to the extent of trying some out.
Here are provided links to descriptions of various evts. Then follows a section listing digitised gold, and other, currencies available to use on the Internet.

ezcmoney | webmoney | netpay | solar billing | stormpay | moneybookers | click and buy

What digitised gold, and other, currencies are available?

There are various private (that is, not controlled by a nation state) digital currencies such as e-gold, GoldMoney, E-Bullion, Pecunix.

There are also other payment systems not backed, or not backed entirely, by gold. These include Evocash (backed by US$), PayPal (backed by US$), NOCHEX (backed by UK£).

The listing below has been completed where the details concerned were available and appeared interesting. More entries and data will appear as I have time, or as further information is available.

Many of the “independent exchange market makers” listed in the more detailed document on e-gold also do transactions in other value transfer media.

e-gold | goldmoney | e-bullion | pecunix | evocash | paypal | nochex

value transfer mediums—a listing

The topics security/account verification and downside often overlap.

[Information on site security is being added as found.
A hyphen indicates no information as yet added, rather than necessarily no information available.]

e-gold

brief description further information

Payments in gold (silver, platinum, or palladium) may be made from customer to customer internationally, using an (Internet) account-based system.

backed by

electronic currency:100% backed by secure metal reserves of gold, silver and platinum (bullion), kept free of any liabilities and held in trust for e-gold account holders, owners of the e-gold. Only G&SR (the trustees) can buy more gold for the system.

legal jurisdiction

-

first went on-line

1996

number of account-holders

“about 1.2 million funded accounts through which transactions worth $1.5 billion were conducted in 2005.” January 2006

approx. reserves held

Gold: 1,852,285.82; silver: 4,309,923.31; platinum: 12,441.39; palladium: 12,331.69 (all as at 13.10.2004)
Detailed information at examiner page

costs information / the downside

 

further information

security/account verification

-

GoldMoney

brief description

Similar service to e-gold, but handling only gold. Payments are made through the transfer of a specified weight of gold. Transfers are made electronically, while the gold remains safe in the vault. Payments are made immediately using the Internet.

backed by

electronic currency: gold stored in a high security/account verification vault.

legal jurisdiction

The Bahamas

first went on-line

2001

number of account-holders

“about 15,000 accounts” September 2004

approx. reserves held

-

costs information

account fee: 100 mils (0.1 of a gram, or about $1.25) per month, regardless of the amount of goldgrams in your Holding
payment fee: 1%, maximum fee of 100 mils (0.1 of a gram, or again, about $1.25), minimum fee of 10 mils (0.01 of a gram), paid by buyer.

security/account verification

GoldMoney operates using Windows NT and Red Hat Linux on Dell servers and an Oracle database. GoldMoney was designed and built by Dimension Data, a world leader in IT system development. GoldMoney is hosted in Jersey, Channel Islands by Foreshore.
“Corporate governance is excellent and the system is audited. Their servers are on the Channel Isle of Jersey, a worthy financial privacy haven. A truly outstanding automation interface.” September 2004

the downside

To withdraw more than 50gg a month (1gg = 1 GoldGram = approximately US$13.50), a user must provide a copies of an identity document and of a utility bill in the user's name sent to the address provided.
Online merchants and other businesses must have a 'CAP-Verified' Holding before displaying the GoldMoney name/banners on their site.

E-Bullion

brief description

“electronic bullion: international electronic currency fully backed by physical precious metals stored on behalf of account holders in Treasury Grade bullion storage facilities.”

backed by

electronic currency: fully backed by physical precious metals stored on behalf of account holders in Treasury grade bullion storage facilities.
Goldfinger Bullion Reserve Corporation (Delaware, USA) is the entity responsible for management of the bullion reserve services for E-Bullion Company, through whom an account may be funded.

legal jurisdiction

Delaware, USA

first went on-line

“Founded in 1997”

number of account-holders

“e-Bullion.com has about 250,000 accounts, some $12 million in circulation.” September 2004

approx. reserves held

- see http://www2.e-bullion.com/reserve.php

costs information

No storage fees
No fee for transactions between e-bullion account holders

security/account verification

“Their Cryptocard security/account verification is top-notch. They recently moved their servers to Switzerland, a respected financial privacy haven. A good quality automation system is available for shopping cart interfaces.” September 2004

 

the downside

“Monthly service charge”: “equivalent to 1/3rd of a gram of Gold at current exchange rates. This equates to approximately $4.20 per month/ per account”.
“Liquidation fee” (for closing account): 2% for liquidating e-Currency®, and 3% for liquidating e-Bullion™ (gold and silver) through e-Bullion's primary wholesale/Exchange Provider, Goldfinger Coin & Bullion, Inc.

pecunix

brief description

“International digital currency.”
“The Pecunix System is an Internet based system, which facilitates the conversion of Fine Gold into the digital currency known as Pecunix which can then be exchanged electronically between Users on the Pecunix System for the purposes of making or receiving Payments.”

“all Payments once initiated by User on the Pecunix System are final, non-reversible and irrevocable.”

backed by

“Underwritten at all times by a corresponding amount of unencumbered physical Fine Gold held in Allocated Storage within the Repository on behalf of the Users.”

legal jurisdiction

Panama

first went on-line

October 2002

number of account-holders

-

approx. reserves held

1579.499 Troy ounces Fine gold (from 26.09.2003). The gold bars are stored in Zurich, Switzerland.

costs information

“Fees are deducted automatically when each transaction is processed. There are 3 options: payer pays fees, payee pays fees, or the fee is divided 50/50 between the two.”
“The payment fee is 0.50% of the payment amount up to 100.00 GAU and 0.15% of any amount over 100.00 GAU to a maximum fee of 3.00 GAU.” [GAU=grams of gold]

security/account verification

• email address rather than an account number used for login identification
• only four digits from one of three 16 digit passphrases are used, entered by clicking on a drop-down pad so Pecunix login system is effective against 99.9% of keylogging trojans
• PGP-encrypted login possible
Pecunix “has excellent security/account verification features and will encrypt all communications to your PGP key if you wish. Servers on New Zealand.” September 2004

the downside

-

Evocash

brief description

Electronic Verification Order of Cash is a secure internet-dedicated means of transferring digitised US dollars across the globe by means of the Internet. evocash is designed for transferring funds, world-wide, 24 hours a day, immediately.
“All transfers, redeems and instructions initiated by the user are final and not reversible.”
“comparable to PayPal in that it is a dollar transfer service. Probably several million accounts. Circulation figures are unpublished. Servers are probably in Spain. ” September 2004

 

backed by

As far as I understand, Evocash considers itself to be an electronic currency backed by US$.
“The daily purchasing power of one evo is equal to one U.S. dollar.”
No reserves held, other than what is in members’ accounts

legal jurisdiction

-

first went on-line

-

number of account-holders

-

costs information

opening an evocash account: free
no recurring service charge
funding: none
transfers:
withdrawals: varying administrative and processing fees

security/account verification

-

the downside

“the User must complete the "Client Information Form" and provide true, accurate and complete registration information (and inform the Company of any change in personal or trading circumstances). [….] If circumstances are brought to the attention of the Company that the User is no longer eligible, the Company, without prejudice to other remedies, will have the authority to suspend and terminate the User's Reserve. Any costs arising from such inappropriate actions, will be deducted at source.”

Also, “the [Evocash] Company reserves the right to hold any funds for any transactions that are deemed illegal.”

EZCMoney

brief description

EZCMoney is an online person to merchant alternative payment system with currently approved EZCMoney merchants.
Customers
EZCMoney does not accept credit cards, so that personal information is kept private. All EZCMoney customer accounts are pre-funded and work like a debit account. The only personal data required, in order to allow online transactions, is a valid e-mail address (which can be created with any provider such as Hotmail or Yahoo). EZCMoney has ZERO customer fees. The account is pre-funded, thus avoiding high finance charges associated with credit cards, or queries regarding credit status.

backed by

EZCMoney is not an electronic currency.
No reserves held, other than what is in members’ accounts.

legal jurisdiction

-

first went on-line

-

number of account-holders

-

costs information

Merchants:
Standard accounts are limited to Domestic (US) accounts, with 1.9% transaction fees.
Non-standard account fees may vary from 1.91% to 8.0%, the fee being determined solely by EZCard Inc.

security/account verification

-

the downside

-

WebMoney

brief description

Russia-based “ WebMoney Transfer is a system providing the management of flow (circulation) of WebMoney in real time on the Internet.” “WebMoney Transfer provides Internet users ( person or corporate) all over the world with an opportunity to conduct safe transactions in real time: send funds, discuss business matters via voice mail or secured WM Keeper messenger.”
WebMoney units are purchased and held in a ‘purse’ to be spent at participating web-sites.
faqs

backed by

WebMoney is not an electronic currency.
“WebMoney is not a bank and WebMoney payments are not processed by banks.”
No reserves held, other than what is in members’ accounts.

legal jurisdiction

- (possibly Panama, but contact address/phone number in Moscow)

first went on-line

“founded in 1998”

number of account-holders (members)

1,123,987 as at 23/11/04 (detailed statistics)

costs information

Registration with WebMoney Transfer is free.
0.8% transaction fee is charged to the sender (transaction fee varies according to type of ‘purse’
Transferring funds from a WebMoney ‘purse’ to a bank account costs include the agent’s fee as well as WebMoney’s fee of 0.8%.
deposit and withdrawal cost information here

security/account verification

WebMoney utilizes a multi-tiered system of protection. WebMoney uses adequate measures of security and protection of funds. It is impossible to enter the system and acquire control of funds without a personal unique twelve-digit WM-ID, private key file and passport.

 This system technology virtually eliminates possibilities of unauthorized access to WM-IDs, as well as the possibilities of conducting transactions from purses with zero balance. All operations in the system including billing operations, transfer of funds, sending and receiving messages, etc, are conducted using a 1024-bit RSA asymmetric encryption algorithm.”

the downside

Installing WebMoney third party software required.

 

PayPal

brief description

PayPal offers facilities for person-to-person on-line payment services. It works fine for plenty of people, and with no problems.
Allows chargebacks.
Further details

backed by

PayPal is not an electronic currency. It is a currency transfer system.
No reserves held, other than what is in members’ accounts

legal jurisdiction

Ohio, USA

first went on-line

-

number of account-holders

45 million members worldwide [2004]
200,000 transactions a day [2004]

costs information

about 3 – 4% for the recipient

security/account verification

-

the downside

Chargeback system allows the payment organisation to reverse deposits made up to 180 days (6 months) after a transaction.
Arbitrary security/account verification rules allow the payment organisation to freeze bank accounts.

 

[Billpoint has been withdrawn since eBay bought PayPal]

NOCHEX

Available for UK residents only.

Technocash

Available in Australia only.

netpay

12 November 2004:

“NetPay has undergone some incredible changes in the background, finding suitable investors to maintain and propel the NetPay service ahead of any other currency service online. A new server with some of the best hardware available to defend against traffic related issues is currently being tested.”

brief description

“Within the coming year, it should be possible for all users to arrange instant Gold based currency exchanges, with the addition of our own Gold based currency system within NetPay.”
Does not allow chargebacks.

backed by

-

legal jurisdiction

Panama

first went on-line

-

number of account-holders

-

costs information

-

security/account verification

-

the downside

-

solar billing

brief description

“With Solar Billing, all parties have a Solar Billing account through which all transactions flow. You fund your Solar Billing account with a credit card, check, or other form of payment, and we make a transfer per your directions to the seller's Solar Billing account. All parties may maintain a balance in their accounts, which they can then use for other goods and services, or they may take it as a payment if they wish.”

backed by

Solar Billing is not an electronic currency
No reserves held, other than what is in members’ accounts.
Allows chargebacks.

legal jurisdiction

Gibraltar

first went on-line

-

number of account-holders

-

costs information

fees for transferring funds between Solar Billing accounts
12.5% of value + $0.30

security/account verification

Solar Billing uses SSL technology. When sending a payment using Solar Billing, the recipient does not receive sensitive financial information like credit card or bank account details.

“In order to withdraw money from your Solar Billing account, Solar Billing may require you to provide Solar Billing with a number of forms of identification such as your email address, your bank account, or your social security number.”

the downside

“By accepting a credit card payment, you agree that you are responsible for chargebacks associated therewith. Upon notification of a chargeback, Solar Billing will reverse the payment and debit your Solar Billing account balance to pay for the chargeback. If there are insufficient funds in your Solar Billing balance, you agree to reimburse Solar Billing.”

stormpay

brief description

StormPay Inc. is an online payment system, very much like an online checking account. After funding their account, the customer has the ability to send funds to any recipient with an email address. Most "deposit" options are instant, allowing the customer to immediately make a payment for an online product, service, or subscription or make donations. Customers may deposit funds into their StormPay accounts via credit card, online check, or Money Orders.

backed by

Stormpay is not an electronic currency

legal jurisdiction

Tennessee, USA

first went on-line

2002

number of account-holders

-

costs information

Open an account, send money: Free
Adding or withdrawing funds: Free except by bank wire (add $15, withdraw $25)
Receiving money: 6.9% plus 69 cents per transaction

security/account verification

Accounts may have one of several status levels that affect how fast funds will be released from an account for payment:

• Unverified status - Cannot withdraw funds that were received less than 5 days previously, no spending from credit cards
• Verified status - done by various phone calls to the account holder and their bank/credit card company. Done before first spending with credit card or E-check. Cannot withdraw funds that were received less than 5 days previously
• Certification by faxing or snail-mailing copies of a government-issued ID (driver's license or passport) and a recent utility bill verifying address to Stormpay.

the downside

Chargebacks: Because StormPay has to reimburse their payment processor both the fraudulent payment and a chargeback fee of $35, the recipient will have to repay both amounts. Chargebacks occur most commonly when another user has apparently funded their StormPay account using stolen financial information, or when they pay without sufficient funds in their checking account to cover the transaction.

moneybookers

brief description further information

an electronic money service, using email to communicate transactions between users.

backed by

moneybookers is not an electronic currency

legal jurisdiction

United Kingdom

first went on-line

-

number of account-holders

-

costs information

further information

security/account verification

• “We use multiple layers of security to help protect transaction information.
  • Moneybookers uses Secure Sockets Layer (SSL) technology to help protect user information against unauthorised access from third parties, loss and fraud.
  • In addition, when a payment is sent using Moneybookers, the recipient won't receive sensitive financial information like the sender's credit card or bank account number.
  • Our servers sit behind an electronic firewall and are not directly connected to the Internet, customer information is thus available only to authorised computers.”
    
    
• a user’s access to their moneybooker account is on a secure webpage, using a previously confirmed email address, a password and a Turing number entry to prevent automated password hacking.
• an email reply is sent when opening an account, with a code that you enter in moneybookers to confirm the email address given.
  Because the user funds their account from their bank account, previously verified by the user’s bank, no further account verification is required unless you wish to move larger sums or use a credit card.
• moneybooker is a financial institution regulated by the Financial Services and Markets Act 2000 in the UK (FSA Register No: 214225) and the EU directive on electronic money.

• Before being able to transfer larger amounts (over about £4,000 in 90 days – this amount is not clearly defined), your bank account must be verified.
  
  Bank account verification is done by making a small (2 euro) funding to your moneybookers account using a credit card. The account should be cleared in about 48hours.
  Verification of your credit card is still required for any other credit card transaction within moneybookers.
  
  
• Before being able to use a credit card (for any other purpose than bank account verification), the credit card must be verified.
  In a limited number of countries (for residents of the United Kingdom, Denmark, Estonia, Germany, Norway, Switzerland and the Netherlands), “verifying” the bank account associated with the credit card can be done by making the small (2 euro) funding as described above.
  
  Otherwise, the credit card must be verified by sending clear and readable copies of the following to moneybookers:

1. the front and back of the credit card; AND
2. a recent credit card statement signed by the credit card owner (purchase or ATM advice slips cannot be accepted); AND
3. a valid official identification document with picture (such as ID card, passport or driver's license).
   

bitpass

 

brief description

A micro-payment system using e-gold.
“To purchase online content or services, Spenders buy a virtual prepaid debit card using trusted pay-in methods, such as PayPal, Visa, MasterCard, Discover, or American Express.”
Pay as little as one cent. No software to install.

 

backed by

egold

legal jurisdiction

(California)

first went on-line

2002

number of account-holders

-

costs information

None while in beta stages

security/account verification

-

the downside

Chargebacks can be made:

click and buy

[Note that the link above is to the UK site. Click on international to reach a menu of sites for twenty-eight countries.]

brief description

for users:
• One-time free online registration
• Secure payment
• Immediate access to paid content with 7,000 merchants [elsewhere 11,000 claimed]
• Convenient monthly payment through direct debit, credit card, invoice or prepaid accoun
• Overview of purchases made in real tim
• Transparency and cost control in your personal account management
• An up-to-date overview of open transactions, current subscriptions and invoices
• Customer service seven days a week
• You fund your account with a minimum of 10 euro (or equivalent in other currencies). This stored balance does not expire.
  
  for merchants:
• Secure transactions worldwide: licensed for e-Money by the British Financial Services Authority (FSA)
• 46 international payment methods worldwid
• 27 country-specific portals operating in 13 languages and 23 currencies
• 24/7 multi-lingual Customer Care
• faqs page

backed by

Intel Capital
Deutsche Telekom AG
3i

legal jurisdiction

Germany

first went on-line

1999

number of account-holders

7 million

merchants

7 - 11,000
includes Apple iTunes, Skype, msn, AOL, Electronic Arts (EA), meetic, PARSHIP, SanDisk, tiscali, T-Online, ARCOR, Nero, Yamaha, Codemasters, Betfair, BT Netprotect, Bet and Win, Auto Trader, GMTV, Habbo, more here.

costs information

user/customer:
funding with credit card: 3.9%, funding with direct debit: no fee.
withdrawals to unconfirmed bank account: $1.50 [note: amount will vary slightly for other currencies and countries]; withdrawal to confirmed bank account: no fee.
Maintenance fee: none
merchant:
Signup fee: 49 euro + 5 euro/month basic cost.
For a small trader, commission charges might be:
2.9% + 30 cents on all transactions over $2
5% + 5 cents on all transactions under $2 .

 

security/account verification

“We use SSL technology to encrypt all data transferred in both directions between you and us over the Internet.”

 

With the Active Fraud Response System, merchants can reduce significant processing costs and chargebacks through its “proprietary Pattern Recognition Engine based on advanced neural network theory. The system will detect fraud throughout the payment process including customer registration, checkout, payment authorization, billing and customer service.

“Depending on the individual risk assessment for every customer and transaction, ClickandBuy may require additional customer verification and other measures to ensure secure payment by reducing fraud. The Active Fraud Response System™ allows tracking of individual user activities and relates them to merchant-specific risk profiles guaranteeing hassle free and secure payments for consumers while preventing fraudsters from using the ClickandBuy service.”

the downside

Having to open an account and fund it a little.
Chargebacks: ClickandBuy claims that they have 1% chargebacks. It appears that chargebacks are instigated by the payment method companies that Click and Buy uses, rather than ClickandBuy itself
Any other problems not yet described.

user terms and conditions
merchant terms and conditions

Selected comparisons

For the purposes of our investigations, abelard.org focused on a number of characteristics of different evts in order to help ‘sort the wheat from the chaff’. The results are tabulated below:

Associated documents on abelard.org

e-gold: a developing example of an independent monetary system

PayPal and Billpoint - more detailed information

Glossary

merchant status:

Bank approval to accept credit cards as payment for goods and services. Obtaining merchant status is only financially practicable for well-established businesses that can convince a merchant bank of their track record (even including having an earth-bound shop front), and who then pass on their merchant account costs to the buyer hidden in their prices. Of course, very large traders have sufficient turnover of sales that this last is only a small part of their turnover and does not greatly affect their pricing.

We are in dispute with Moneybookers, who have arbitrarily taken £129.02 from a transfer from a friend.

Therefore, we cannot at present support this service in good faith. A great shame as the system seemed to offer promise.

disclaimer:

abelard.org takes no responsibility for any communications or transactions made with any of the organisations listed below, nor does abelard.org guarantee that the figures and other information given are accurate, complete, or up to date. Nor is this document to be read as any manner of advice or guarantee.

Caveat emptor (let the buyer beware).

email email_abelard [at] abelard.org

© abelard, 2002, 4 june
major revision 13 december 2004
all rights reserved

the address for this document is https://www.abelard.org/value-transfer.htm

5450 words
prints as 18 A4 pages (on my printer and set-up)