Medium of exchange

Medium of exchange is one of the functions of money. When people talk about cashflow they are usually talking specifically about the utility of this function, which is to have to carry only one kind of thing around to get all other things. If you "put it in a bank" you accept some standard of deferred payment - you have to retrieve the money before you can use it for exchange, or use some trust based instrument like a cheque to do so.

Bank debit cards, and the recently introduced real time verified and debited electronic payment services like Visa Electron (physical), Debit MasterCard (physical) or Verified by Visa (network based), are all examples of isolating the medium of exchange function. Debits do not have any of the other functions of money, that is, they are not a store of value (the unit of account being a national currency, that is assumed to be the store instead), nor a standard of deferred payment (since transactions are instantaneous). This makes various kinds of transactions possible that were not before, since there is no need to get permission from any human to commit, nor have "limits" sent around the network to create a further privacy risk: either the transaction succeeds, or it fails, and all in real time.

A healthy buying infrastructure would seek some dominant position as the new medium of exchange, and might integrate or obsolete these corporate systems with a new standard. The Consumerium Credit visions explore the possibility of the Consumerium checker actually being the means to pay.

See w:medium of exchange for a detailed discussion of theory around this, and how this function of money is changing as Internet Service is assumed in more and more transactions.