The thesis is aimed to propose a financial innovation called COCONUT payment system. This innovative payment system is based on a combination of the cash and electronic money, presented as an ATM-like machine for purchase and payment execution, and operated via an electronic account, which allows its users to operate as a credit cards owner. This study commences with a review of the current major payment systems in the United States, followed by an analysis of the strength and weakness of these systems, and then proposes a payment system that combines the most popular two: cash and credit card with a healthier mechanism on financial control to both avoid the recurrence of financial crisis caused by credit crush and keep the current benefits. The COCOCNUT system can be applied not onbly to the market of the USA, but BRIC, developing and under seveloped countries’ market, those regions where cash remains the major payment way. As for the feasibility and the probability of promoting and applying this new system to replace the current systems or to implement in the new markets, the proposed COCONUT payment system, takes into consideration the differences of markets and regional regulations. The COCONUT project also provides trial calculations of its value proposition from the perspective of the project realization.