Product Brief: e-gold

(www.e-gold.com) is an electronic currency, issued by e-gold Ltd., a Nevis (West Indies) corporation, backed by gold bullion in allocated storage. The system includes a shopping cart interface that allows shoppers to pay in e-gold. There is no cost to set up an account, though when I tried, I got the message, "Unable to create account at this time. Please try again later." 

There are two ways to put money in an e-gold account: (1) receive payment in e-gold from another account holder, and (2) exchange your national currency for e-gold using the services of an independent exchange market maker. See E-Gold Service. http://www.e-goldservice.com

At its simplest merchants can place on their site a link that includes their account number such as, http://100998.e-gold.com. A shopper with an e-gold account can make payment to the merchant's account An e-metal Payment Order Form pops up specificying the amount of gold, a memo field for shopper comments or specifications, the shoppers e-gold account, the shopper's secret passphrase, and a place to copy a "turing number" that can't be read by computers to setting up accounts automatically (after the British mathematician Alan Turing).

There are two kinds of fees: (1) Spend transactions (paying e-metal from one account holder to another) do not involve a currency conversion. The fee for this transaction is 1% of the transaction amount, subject to a maximum of 50 cents (US$) equivalent value. The fee is debited in e-metal from the payee. (2) An Agio fee of 1% per annum is charged to each e-metal account. It is assessed in monthly installments, in e-metal, calculated according to the average daily balance during the preceding month.

Though a few merchants who accept e-gold payments are listed on the website, I don't see much future for the system since it's difficult to get money into the system.