1. Small Case Presentation - 5

2. Case Study Digital Cash Pros: This type of currency is good for gifts. It also limits fraud. Even if the currency is stolen, it can be used only for a fixed amount of purchases.

3. Case Study Digital Cash Cons: Chicken-and-egg problem: Retailers don't want to install new software unless they see a lot of customers using it. Customers don't want to download software unless they see a lot of retailers accepting it. This conundrum is what killed DigiCash Inc., a pioneer in this area, which entered bankruptcy proceedings in 1998.

4. Case Study Virtual Points Pros: help lock in customers to their products. Customers get "free money" if they are willing to part with some personal information and view ads. Cons: Same problem as digital cash. Signing up retailers to accept the currency can be a killer obstacle. Takes a long time to accumulate sufficient points for meaningful purchase.

5. Case Study Person-to-Person Payment Pros: Most person-to-person systems charge no fees to users, because they make their money on the interest earned on the accounts. Some charge fees to small businesses that want to accept payments.

6. Case Study Person-to-Person Payment Cons: An unscrupulous person can collect payments but then fail to deliver the goods. Most person-to-person systems don't promise to pay back jilted buyers.

7. Case Study Person-to-Person Payment Cons: However, PayPal recently said it will take responsibility for transactions in which the seller agrees to disclose his or her bank-account number. Billpoint guarantees transactions when the buyer uses an electronic check, which essentially is a transfer of money from an electronic bank account.

8. Case Study Virutal Escrow Pros: For large purchases, escrow services are a good way for buyers and sellers to protect themselves against fraud. Don't require a long-term commitment. Both parties need only sign up for a one-time usage of the service.

9. Case Study Virutal Escrow. Cons: Most escrow services charge a fee per transaction, but prices have been coming down in the past year. The fees are as follows (all in US$): At Escrow.com, credit-card transactions under $5,000 cost 3.85% of the total dollar amount of the sale, excluding shipping costs. At Tradesafe.com, credit-card transactions cost 50 cents plus 3.5% of the dollar amount of the sale, including shipping costs.

10. Case Study Virtual Credit Card Pros: Buyers can stay anonymous online. Retailers will know your name and address but not your credit-card number. It avoids the obstacle that has tripped up so many other electronic payment systems -- the need to persuade retailers to install special software.

11. Case Study Virtual Credit Card Cons: These services are very new and untested. One possible obstacle is the finite number of credit-card numbers that can be generated and the difficulty of recycling disposable numbers.

12. Case Study Conclusions: 1. Avoid chicken-egg problem. 2. Automation. 3. User friendly. 4. Protect privacy. 5. Security. 6. Multi-platform, devise independent.