Standardizing Retail Payment Instruments

Standardizing Retail Payment Instruments

Simon L. Lelieveldt (De Nederlandsche Bank, The Netherlands)
DOI: 10.4018/978-1-878289-70-4.ch012
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The business of payments and the provision of payment instruments have a rich history, which can be drawn upon in a discussion of standardization. In the middle-ages, for example, the mere existence of a wide variety of foreign and local coins led to a flourishing business of money exchange offices and cashiers in the Netherlands. Malpractices of some of these firms, mostly in the form of physical tampering with coins and alloy, resulted in government regulation on a municipal and province level. Yet, as these type of regulations where hard to enforce, the Amsterdam municipal government decided in 1609 to establish a municipal exchange bank, ‘de Amsterdamse Wisselbank’, originally as a government monopolist. The motivation for doing so was to prevent the regular price-increases of the good coins, to eliminate confusion to the public and to facilitate trade by providing good coins. Later on, in 1621, the regulations were adapted to the actual business practice and private cashiers were allowed – under certain conditions – to conduct business in the city of Amsterdam (van den Berge, 1939, p 34). The example shows us how a diversity of specifications and a diversity of payment instruments, will lead to the development of separate companies which make money by reducing the confusion for their consumers. It illustrates that the abuse of technological know-how and abilities for the sake of increased economic benefits by a few private companies may lead to government intervention for the sake of public interest. Furthermore it indicates that strong market powers may prevail, even in the case of restricted government regulation. As such the example contains all relevant issues with respect to IT-standardization: • can it be assumed that the market will standardize if necessary? • what role should governments play in this process? • does the end-user play a role in this process? In this chapter, I will examine the above standardization issues with respect to the retail payment instruments, developed and in use since the beginning of this century. In this time frame bank notes and coin have been widely available to the public as a basic (and standardized) payment instrument. I will however not include these instruments in this study and limit myself to a study of the standardization of noncash payment instruments that have been available to the consumer. These payment instruments can be seen as the technical means with which consumers effect money transfers to each other. Examples of payment instruments are the forms for credit transfers or in-payments, the debit- or credit cards or home-banking software. It is my opinion that, given the availability of cash an alternative payment instrument, the standardization processes of noncash payment instruments can be seen as the ‘pure’ result of market forces. The study of this process, applied to different types of instruments within one application and industry domain, will hopefully provide additional insight.

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Table of Contents
Chapter 1
Yesha Y. Sivan
The diverse uses of “standards” define the goal of this work, namely, to develop a general framework of standards and to reflect on the process and... Sample PDF
Knowledge Age Standards: A Brief Introduction to their Dimensions
Chapter 2
Consensus Versus Speed  (pages 19-34)
Roy Rada
One standards organization takes years to reach consensus, while another standards organization takes months (Rada, 1995a). Changes are occurring in... Sample PDF
Consensus Versus Speed
Chapter 3
Petri Mahonen
Information Technology is one of the most rapidly developing areas in the technological world. In fact, the classical information technology that... Sample PDF
The Standardization Process in IT - Too Slow or Too Fast?
Chapter 4
T. M. Egyedi
The effect of Information and Communication Technologies (ICT) on our daily life needs no explanation. That standardization reduces diversity... Sample PDF
Institutional Dilemma in ICT Standardization: Coordinating the Diffusion of Technology
Chapter 5
Martin B.H. Weiss, Michael B. Spring
This chapter explores several issues related to intellectual property in the standardization process. Different intellectual property issues... Sample PDF
Selected Intellectual Property Issues in Standardization
Chapter 6
Eric J. Iversen
In today’s environment of rapidly evolving information and communication technologies (ICTs), technical standardization is said to be confronted by... Sample PDF
Standardization and Intellectual Property Rights: Conflicts Between Innovation and Diffusion in New Telecommunications Systems
Chapter 7
Robert Moreton
The purpose of this chapter is to define the context of standards within an Information and Communications Technology (ICT) strategy and to suggest... Sample PDF
Standards, Strategy and Evaluation
Chapter 8
Wilhelm Hasselbring
For integrating heterogeneous information systems, semantic interoperability is necessary to ensure that exchange of information makes sense — that... Sample PDF
The Role of Standards for Interoperating Information Systems
Chapter 9
Klaus Turowski
The field of business applications encompassing software for production planning or order management is dominated by some big vendors offering large... Sample PDF
Establishing Standards for Business Components
Chapter 10
Jaroslav Blaha
NATO as an international organization consists of representatives from 19 nations and has to satisfy the political, operational and technical... Sample PDF
A Standards-Based Common Operational Environment
Chapter 11
Falk v. Westarp, Tim Weitzel, Peter Buxmann, Wolfgamg Konig
Every interaction and all coordination in economic processes is based upon communication. The exchange of information necessarily requires both the... Sample PDF
The Standardization Problem in Networks - A General Framework
Chapter 12
Simon L. Lelieveldt
The business of payments and the provision of payment instruments have a rich history, which can be drawn upon in a discussion of standardization.... Sample PDF
Standardizing Retail Payment Instruments
Chapter 13
Joel West
The influence of institutional pressures on standards and standardization are readily apparent in their most direct form. For example, in the... Sample PDF
Institutional Constraints in the Initial Deployment of Cellular Telephone Service on Three Continents
Chapter 14
Vladis Fomin, Kalle Lyytinen
This article analyses social networks by looking at the standard making processes. As a framework for analysis, actor network theory is chosen.... Sample PDF
How to Distribute a Cake before Cutting It into Pieces: Alice in Wonderland or Radio Engineers' Gang in the Nordic Countries?
Chapter 15
Michael Sherwood-Smith
There is a recognized need to spread computer literacy across every level of society to generate an inclusive global information society, in which... Sample PDF
The European Computer Driving Licence: A Standard of Basic Competence for Personal Computer Users
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