Electronic Currency

Electronic currency refers to money or scrip which is exchanged only electronically. Typically, this involves use of computer networks, the internet and digital stored value systems. Technically electronic currency is a representation, or a system of debits and credits, used to exchange value, within another system. Its development linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayments system.

BitPass, the Menlo Park start-up that gave people a way to make micropayments online.Bitpass is an online payment system for digital content and services. Bitpass is an micropayment service that facilitates online content access transactions by integrating the processes involved in buying and selling content, and making it practical to charge very small amounts of money. In the Bitpass system, transaction fees are paid by the content provider. For payments under $5, the charge is 15% of the price paid by the buyer (Bitpass Professional merchant account fee). Micropayments are by definition very small sums, so the fee is usually just a few cents. For the content buyer, the BitPass system works similarly to a pre-paid telephone card: you sign up for the service and put money into your account using a credit card or PayPal, which gives you credit towards the purchase of content. When the user agrees to pay the cost of access, their account is charged automatically rather than through a link to an external Web site for payment.

BitPass was founded in December 2002 to address the growing demand among digital content providers to efficiently monetize their online offerings through a-la-carte and subscription-based payment models and partnered with major technology and financial services companies such as Microsoft, PayPal, the Royal Bank of Scotland and First Data. Kurt Huang was a co-founder of Bitpass, Doug Knopper was hired as CEO in November, 2005. Bitpass was a California corporation with headquarters in Silicon Valley.

On January 19th, 2007 Bitpass announced that they were shutting down, and operations officially closed on January 26th, 2007. No immediate reason for closure was given, however Bitpass just notified its merchant and consumer customers via email that due to circumstances beyond their control, they were discontinuing their operations and they have partnered with Digital River to provide operational support during the period prior to shut down. As of the day of January 19, 2007, all Bitpass buyers with US dollar denominated accounts are being notified that they have 7 days to spend any amounts that currently exist in their Bitpass Account.

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