December 31, 2005

Paymer Anatomy - anyone an issuer

Editor's note: Daniel Nagy translates an article on Paymer by N. Senchenko. This system is related to WebMoney, and emulates the "anyone can be an issuer" model.

Written by Nikita Senchenko in Russian
("Анатомия Paymer" at,
translated into English by Daniel A. Nagy for educational purposes, without permission.


1. What is Paymer and how do they serve it for lunch
2. More about agents
3. We are issuinig e-currency agent cheques
4. Operations with cheques
5. WM-cards are also Paymer cheques
6. Additional services
7. Business at the speed of Paymer

Why "anatomy"? Why the choice of such a strange title for an article about the Paymer service? The reason is that all users of WebMoney already know about its existence. They know or suspect what functions it is supposed to fullfill. However, as it turns out, Paymer is a subtle instrument, not only having its own philosophy (like everything else within the WebMoney system), but also a whole spectrum of nuances and details, which remain out of sight for superficial observers.

1. What is Paymer and how do they serve it for lunch

Any one of you, dear readers, is able to issue your own payment promises using Paymer. In other words, digital money emission is within anyone's reach. What for? This is a separate question, which we will illuminate in the last part of this article. For now, just imagine that youo want to create your own mini-paymen system. Or raise capital, for example.

How is it going to happen? You are issuing digital cheques -- payment requisites of some sort. Each cheque has its own unique number and code, the number of digits in which are determined by the issuer. You can back your electronic cheques by digital currencies such has WebMoney or e-gold or by US dollars on a bank account. You can also choose not to back them. Paymer records your promises and accepts backing deposits (if they exist). The accounting of your promises, the safekeeping of your backing assets and the redemption of the promises by handing out these assets is done by so-called Paymer Agents, of which there are currently three in our system. We will talk about them a bit later. Each cheque has a nominal value, which is determined by the issuer in the process of emission. The nominal value of the cheque is the amount of money, goods or services that one can receive in exchange for it.

So, the cheques have been issued, their value is backed either by reserved assets or simply the promise of the issuer. From this moment on, any holder of the cheque (in other words, one who knows both its number and its code) can return it to the issuer and receive the valuables that are due to him: WebMoney, e-gold or those goods/services, which the issuer promised to hand over/render to the bearers of his cheques. This is called redemption of cheques; in essence the exchange of promises for backing.

The requisites of cheques can be handed over multiple times from one person to another, using any means of communication: e-mail, fax, telephone, ICQ, on a piece of paper from hand to hand -- that is, as you please, over the Net or outside of it. By telling the number and the code of the cheque, you are handing it over to the new holder. Unlike banks' cheques, Paymer cheques do not have any fixed physical embodyment. The requisites can be stored in any way in any place -- on paper, in a file or in the memory of the holder.

Cheques constitute value, as they imply benefits to the holders. Thus, they can be used as payment. In order to facilitate the acceptance of cheques over the Internet for commercial entities in exchange for their goods or services, Payment provides them with a special interface Paymer Merchant [link:], using which the process can be automated.

Paymer lets the holders verify the validity of cheques and their nominal value using the number of the cheque or the number and theh code. This lets sellers avoid accepting "counterfeit" cheques for their goods. Additionally, cheques can be split into several smaller ones with the same summary nominal value. One can merge several smaller cheques of the same issue into one with the nominal value equal to their summary nominal value. One can exchange the requisits, for example, when accepting cheques thereby becoming the new exclusive owner, as the new requisits will be known to you alone.

The emission and the servicing of the cheques is paid for by the issuer; Paymer takes 1% of the sum of the emission. However, there is no comission whatsoever for the verification, splitting, merging and exchange of requisits. Therefore, cheques can be handed over from one holder to the next multiple times, verified, split, etc. without losing their nominal value.

Paymer, in essence, is that same "digital cash" in its purest form, about which its father and chief ideologue, David Chaum has dreamt. Quite possibly, to this date it is the only one of the practically functioning automata realizing almost all functions of digital cash. Its characteristic properties are as follows:

* Unencumbered access to "emission button" for anyone willing to issue.

* Innovativeness. Paymer cheques are a new generation of money from a financial point of view.

* Protection. It is not feasible to counterfeit cheques or quess their codes.

* Anonymity of digital cheques (a characteristic property of cash).

* Instantaneous clearing. Redeeming a cheque or paying with it takes mere seconds.

* Irreversible payment and clearing.

* Free transactions for users (as opposed to cashless transactions, for example).

* Workable in any communication environment (online or offline). Paymer cheques can be used for payment within the Internet and outside of it.

* Openness and accessibility for each person, without any limitations. In order to use cheques, there is no need to show your ID, to register or to open an account anywhere, etc.

In this article, we will tell you in detail how to issue your own cheques, how to transact with others' cheques and what additional services exist in the Paymer system. Finally, we will tell how is Paymer useful for businesspeople and other enterprising comrades. But first, we describe Paymer Agents in detail.

Posted by iang at December 31, 2005 02:34 PM | TrackBack

Thanks for reminding me. I will continue the translation as soon as I get some breathing space between my various duties. Also, expect the full Paymer API to be published by the developers (Computing Forces, Inc., Moscow, Russia) later this year.

Posted by: Daniel A. Nagy at January 2, 2006 05:26 AM

Apologies for the late post, it slipped off my desktop! Looking forward to the next installment.

Posted by: Iang at January 2, 2006 08:14 AM
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