The primary example of this type is First Virtual . In this type of system, the information need not be encrypted since financial transactions are done completely off-line. The second type is an extension of the conventional notational fund transfer . In credit card or check transactions, sensitive information is being exchanged. For example, you give your credit card to a merchant, who sends the card number through phone line and receives confirmation.
Banks meanwhile receive the same information and adjust buyer's and merchant's accounts accordingly.
The information being transmitted online in this case is encrypted for security. This type is becoming the mainstay of online payment methods because consumers are familiar with this system and current players have vested interest in extending that system to the Internet. The problem with transactional security has been overly played on the traditional media, but with proper caution and encryption, the Internet may be more secure than phone lines for this same old payment methods. The third type include variations of digital cash, electronic money and coins. Digital currency will become dominant when paper-based economy finally turns into the digital economy.