Offline e-cash involves the use of smartcards on which are downloaded digital electronic units of cash previously paid for. Digital cash is similar to checks and credit cards but has a number of additional advantages for both the consumer and the merchant. The first, as with many modern ecommerce technologies, is low cost of overhead. Ecash transactions are possible for amounts as low as one cent. Online e-cash was pioneered by DigiCash .
Payment is made online and deducted from digital funds available.
Online e-cash payment allows a range of versatility in interactions between surfers and websites. As the Internet becomes more commercialized, websites are searching for ways to charge consumers for a wide variety of services including micro-transactions allowing surfers to pay for downloads, page views, interactive gaming. Online e-cash allows the user's PC to communicate with a website and instantly make payments with digitized funds via the hard drive. There are a number of different payment schemes for initially procuring such funds from an e-cash provider. E-cash therefore allows direct transactions between people.