Tuesday, August 4, 2009

Alternative Payment Systems: Lithuanian Outlook

Mykolas Romeris University (Vilnius, Lithuania) published "Alternative Payment Systems: Lithuanian Outlook" by Darius Štitilis and Marius Laurinaitis in its 2008 Number 2(4) edition of Intellectual Economics. Darius is on the Faculty of Economics and Finance Management, Department of Informatics and Statistics as Associate Professor. He is also the author of more than 20 scientific articles and four manual books. Marius is on the Faculty of Economics and Finance Management, Department of Banking and Investments as Lector.

Summary

The article elaborates on an electronic payment instrument of a new generation – electronic money and preconditions for using this instrument in Lithuania. It discusses the definition of electronic money, analyses requirements defined for electronic money, as well as needs of buyers in the framework of electronic commerce (security, low cost, universal nature, etc.).

The article discusses problem issues of double spending of electronic money, issue of electronic money, and establishment of specialised banks in Lithuania. A considerable focus is made on the analysis of the relation between electronic money and payment cards, as well as disadvantages of payment cards against electronic money. The authors also raise a problem of legal regulation of electronic money – the authors believe that electronic money brings in novelties into thus far settled doctrines of settlement regulation, therefore, the current legal regulation must be immediately adjusted to the new reality of electronic money and at the same time avoid restricting implementation and usage of electronic money systems. From the conclusion:
"Electronic money must be perceived as appropriate payment instruments which are purchased by the user at an electronic value from a person who provides an electronic money issuing service. The aforementioned electronic value must be equated to cash. Also, absence of linking to a bank account and acceptance by natural and legal persons other than the issuer are very important features of electronic money."
Additionally, it cites extensively the 1995 digital cash work of fellow Lithuanian, Jon W. Matonis.

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