only be finalised with a delay. 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 dependent 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. in determining whether electronically stored monetary value is “ money ”, it is worth reflecting on the main attributes of currency, i. e. the notes and coins issued by the reserve bank. 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. it is valid for payment in all places and circumstances, and its status can only be questioned where forgery is suspected. payments made by means of currency are definite. they are final and irrevocable at the point when they are made, and are not dependent on the operation of any clearing or settlement arrangements. these attributes collectively imply that currency is generally accepted. however, it is not in all cases the preferred method of payment, particularly for higher value transactions, since use of currency involves handling, storage and security costs which may not arise to the same extent with other methods. payment by means of certain electronic methods score well on some aspects and poorly on others. however, the relative importance of these various attributes is very dependent on the type of payment being made. cash can be very convenient in some situations, but a real nuisance in others – and the same is true for other technologies. probably the key conclusion is that different payment technologies are not inherently inferior or superior to one another. rather, each one of them has an appropriate place as, indeed, the current happy coexistence of a number of overlapping or competing alternatives clearly indicates. stored value cards and other new forms of payment will result in some

being developed or are already available for electronic payments and banking and which are, or could be, activated through atms, telephonic devices, personal computers, intelligent cards and card - reading devices. most central banks are specifically considering the impact these products and e - commerce will have on their functions, and the regulatory and operational requirements which are necessitated. in south africa, several major banks have already launched internet banking services and all the major banking groups are investigating, or developing, multi - purpose smart cards using microchip technology which enable electronic “ purse ” facilities. although these new payment technologies are still in various stages of development, the south african reserve bank, as other central banks around the world, has a direct interest in anticipating their likely policy implications. emerging electronic money products may require regulatory adjustment or intervention which will arise from : the need to limit the systemic and other risks which may threaten the stability of, and confidence in, the national payment system ; the need to provide consumers with adequate protection from unfair practices, fraud and financial loss ; the need to ensure the central bank ’ s ability to conduct monetary policy ; and the need to assist law enforcement authorities in the prevention of criminal activity. while these products are still being developed, the bank is reluctant to impose regulation that could hamper the introduction of innovative and promising technologies. at this stage, the bank is of the view that it should rather concentrate on understanding the emerging technologies and the issues they represent. opportunities which these new technologies offer should also be investigated and exploited to the benefit of the country as a whole, i. e. how the emerging technologies can be used to make financial services more accessible to those in the low income, unbanked and rural communities in south africa ; and how the emerging technologies can be used for cash displacement and to solve problems such as the cost of cash handling and robberies. 3. the characteristics of electronic payments basically two methods of making payments can be distinguished. the first is the account transfer system. in this system customers issue instructions to banks to debit the account of the person making a payment and to credit the account of the person receiving the payment. payment methods which fall into the account transfer category include cheques, debit cards, credit cards and telephone banking. depending on the type of technology that is used, these payments can in some cases be finalised immediately after they have been made, for example debit card transactions. other account transfer payments, notably cheques, are conditional, and will