Five Categories Of Payment Mechanisms

The different payment mechanisms are classified in five categories as follows:

ATM-model transactions-This involves only a financial institution and an accountholder who either deposits or withdraws money from his/her account;

Unmediated Two-Party Payments-In this case the buyer and seller are the only two parties involved in the transaction--for instance, cash payments in national currency or Ithaca HOURS;

Mediated Three-Party Transactions –This involves payments with credit or debit cards or with cheques as do most LETS and Time Dollar transactions.

Micropayments-Until now only they are applicable in new forms of electronic payments where the service or information is metered out and charged on very small increments, e.g. traditional telephone charges, new automatic toll charges, and other digital cash applications; and

Anonymous digital cash –The electronic encrypted currency, pioneered by David Chaum's Digicash , which ensures that--as with paper currency and coins--the privacy of the cash user remains protected.