Are new forms of retail payments really new?
Are we ready for the electronic finance revolution?
AUTHORS: Sutton, David
No cash? No problem: pilot programs spreading for new forms of payments
What's really new about the new forms of retail payment?
Rapid developments in technology have brought about new methods of retail payment-such as remote banking, electronic cash, and debit, stored-value, and smart cards-that were unavailable a decade ago. Some observers believe that these alternative payment methods will differ from traditional methods not only in a technological but also in an economic sense and will alter how consumers and businesses interact. ; This article examines the question of whether, from the standpoint of economic theory, there is or will likely be anything new about these new forms of payment. The author describes some of the conflicts of interest that confront all types of payment systems in market economies. He then considers why traditional forms of payment, such as checks and banknotes, represent reasonable solutions to these conflicts of interest and outlines some shortcomings of the traditional forms. The article also analyzes the economic characteristics of the new forms of payment and explains why they differ little and in some cases not at all from more traditional forms. Finally, the author concludes that the same policy issues that apply to the creation of checkable deposits and to the issue of banknotes should apply to the creation of the new forms of liabilities.
AUTHORS: Roberds, William
Network externalities: the catch-22 of retail payments innovations
An investigation of one of the reasons why electronic payments have not yet supplanted cash and checks in retail transactions: Consumers willingness to use an innovation depends on the number of merchants who have already adopted it, and merchants willingness to invest in the innovation depends on the number of consumers who are already using it.
AUTHORS: Osterberg, William P.; Thomson, James B.
Bank notes and stored-value cards: stepping lightly into the past
Like the bank notes that circulated in this country from 1863 to 1913, stored-value cards substitute the liabilities of private banks for government and central-bank liabilities. This shift may have important implications for the federal budget, the money supply, and monetary policy.
AUTHORS: Thomson, James B.; Osterberg, William P.
Money in the twenty-first century.
What implications do 21st century monetary innovations bring for holdings of central bank money and standards of value? Emerging technologies such as cybercash, e-cash, and smart cards can be expected to reduce demand for central bank money, but the theoretical framework for monetary policy has not changed. The authors stress three points in this paper: 1) money innovations tend to reduce the demand for central bank money, but it remains to be seen whether the predictability of that demand, and thus the reliability of monetary policy, will decline in the coming century; 2) in principle, monetary authorities can continue to determine the price level as long as final settlement of tax and other obligations takes place using central bank liabilities; and 3) the viability of competing currencies and standards of value is gaining steam as a lively field of research.
AUTHORS: Jordan, Jerry L.; Stevens, Edward J.
An exploration of the issues that must be addressed if stored-value cards and other electronic money systems are to be major payment mechanisms in the global financial market.
AUTHORS: Good, Barbara A.
Are mobile payments the smart cards of the aughts?
This article compares the much anticipated but ultimately stalled smart card revolution of the 1990s with the current expansion of mobile payment platforms, and asks how mobile payments fit into the larger payment system.
AUTHORS: Jacob, Katy
Will that be cash, check, charge or smart card?
AUTHORS: Zaretsky, Adam M.