The second method of payments is the direct transfer or token system. In this system money or a form of money is established, which can be directly handed from one person to another, with or without the direct involvement of any bank in the transaction. These forms of money are purchased from an issuer, who ultimately carries the obligation to redeem them. The transaction is final at the point when it occurs, and is not dependant on the operation of some underlying settlement system. Cash is the most widespread example of a token system, but in fact there are a number of other examples, such as multiple-trip train and bus tickets.
Currency is a standard product and is therefore easily recognised and identified.
It is risk-free, in the sense that the Reserve Bank stands fully behind it. It is fully negotiable. Possession of currency is sufficient to establish a right of use, and it can be simply handed to someone else in order to make a payment. Usage is anonymous and not directly traceable. It is convenient and efficient for making small payments.