Internet currency is a form of electronic payment. It was created with the goal of having a global payment option that could be used across the Internet. The birth of eBay® in 1995 inspired the push for an Internet currency, as it heralded the start of a new age of website storefronts. By the end of 2001, the idea mostly died out as a trio of major companies, beenz.com, InternetCash.com and Flooz.com, which offered the currency not only failed, but in some cases left several angry customers with credits that were now worthless.
The primary idea behind the Internet currency companies was that the customer would buy or earn credits, which could then be used to purchase items and services from either a variety of vendors or one particular store. This system was considered to be an effective way to increase global commerce as customers in developing nations who could not afford to have credit cards — and their associated debt — now had another way to participate in electronic commerce.
When Internet currency companies beenz.com, InternetCash.com and Flooz.com stopped operations in 2001, several customers were not given the opportunity to spend their credits. While the currency from beenz.com was based on earned credits, customers of Flooz.com had the option of paying cash for credits and thus lost not only earned credit, but their own funds. This was the cause of much controversy and discussion in the media.
In the case of Flooz.com, the vendors that had accepted these methods of payment learned of the company’s struggles before their customers. Many consumers learned that their credits had no value because they were informed by vendors that they were no longer accepting them as currency. Flooz.com not only did not contact their customers first, but eventually only gave them four days to use their credits before they lost their value.
The beenz.com model gave customers the opportunity to earn credits by performing tasks, such as visiting a particular website or shopping on other sites. Those credits could then be used at the websites of participating vendors. The company folded in 2001 and was sold to the United States firm Carlson Marketing Group. When that company also began to struggle, the beenz.com idea was eventually discontinued.
InternetCash.com was based on pre-paid cards that could be used to purchase goods and services online. Each account had a card number and a personal identification number (PIN). Customers shopping at participating sites would be directed to an outside site owned by InternetCash.com to enter their payment information and complete the transaction. The company spent most of its capital on building its infrastructure and that, coupled with the failing Internet economy of the late 1990s and early 2000s, led to its closure in 2001.