Posted by arlene

The modern monetary system freed itself of material support by replacing it with a generalized system of trust based on continuous growth. In the past, monetary creation was absolutely limited by the scarcity of materials to be exchanged or of precious metals for minting coins. Now, however, money liberated from a material basis, in particular electronic money, gives the impression of a creation ex nihilo of money that can multiply autonomously without any physical work.

Yet, because trust is a subtle mixture of objective and subjective data, acceptance of means of payment cannot be decreed. If the success of the individual components of electronic commerce (multimedia conversations, organization of data networks, encryption, or the microprocessor card) has been proved, the acceptance of the combination of these components in a system of commerce undoubtedly will be influenced by economic, sociological, political, and, above all, human factors.

The Minitel, a French product of the 1980s, was the first success in the consumer arena, although this success could not be exported. With the Internet lies the possibility for the first time in history to blanket the planet with the whole value chain from the producer to the end user. The Internet has allowed the growth of a worldwide economy of donations, which has produced new forms of social interactions. Participants in this economy have formed new types of remote collaborative networks, bypassing earlier structures such as the postal service and the telephone network. The spirit of sharing in the Internet has .taken the form of an economy based on programs available at no cost and free of commercial constraints (freeware) and of advice given without fee on newsgroups.

All indications suggest the establishment of a monetary economy on the Internet will be of a different nature. First, a complete infrastructure is necessary for electronic commerce to the general public — readers, servers, secured networks, means of payment, etc. Second, the Internet has matured in a context where it is physically impossible to sustain ambitious growth rates because of the saturation of the rich markets, the progressive depletion of natural resources, and the risks of pollution. In this sense, postmodernity can be perceived as an attempt to accommodate the cultural and ideological necessity of growth, given the limits of the physical world [Haesler, 1995]. The theme of electronic commerce would thus give a meaning, design, and collective ambition to the utopia of this close of the century, a virtual economy without borders in a huge, worldwide market that is totally deregulated but nevertheless dominant. The production of wealth would not be considered as the addition of material value but simply the movement of information in the form of simple monetary transactions. This virtual economy expresses the emergence of a new social class whose wealth does not arise from physical properties but from the power to manipulate symbols [Lash, 1994].

Nevertheless, the technological promises of the Internet should not make us forget that cultural factors will govern the political choices, thus affecting the future of each offer of electronic commerce. For example, until today the Internet has been better received in the countries that Hall calls low-context countries (the

Anglo-Saxon and Nordic countries) than in high-context countries (France, Italy and Spain) [Les Echos, 1998]. On the other hand checks are the scriptural money most frequently used in the U.S. and France, whereas bank card transactions dominate in Canada and the U.K. Finally, Giro transfers are by far the most dominant mode in Switzerland, Belgium, the Netherlands Germany, and Italy. Designers of electronic commerce systems will probably have to consider these cultural differences as well as the current changes in each of these societies because new technologies and transformations of lifestyle may ease the emergence of channels of distribution for remote financial services without necessarily changing daily behavior. Thus, although it may be premature to anticipate the exact modalities for the settling in of each instrument, it is legitimate to assume that their success will depend on the context, i.e., preexisting conditions and the social environment.

Consider the case of the smart card as an example. Clearly, its level of success in different countries is quite distinct. The trials of Citibank and Chase Manhattan Bank conducted on the Upper West Side of Manhattan between April 1996 and October 1997 could discourage banks and merchants in the U.S. from committing themselves to that form of money [Hansell, 1998]. These trials confirmed the data that Visa Cash gathered during the 1996 Olympic Games in Atlanta and are similar to the setbacks that Mondex encountered in Swindon, England, and Guelf, Ontario, Canada. All these tests have not elicited enthusiastic responses — far from it. Several reasons have been advanced to explain this lackluster performance, ranging from the absence of a dense network of card readers, to the cost of these readers, to the needed changes in the work procedures of the merchants, to the price of monthly subscription fee, etc. However, all these explanations ignore the cultural foundations that fashion individual attitudes toward money.

The contribution of the Internet, while important, must be put into perspective. Telematics applications in business-to-business commerce are several decades old, and the integration of the internal processes of several enterprises in a network requires much reflection beforehand. The various projects that were elaborated within the framework of EDI have allowed the networking of enterprises at a worldwide level and increased the efficacy of the processing of commercial transactions. EDI, however, is not merely a new technology for telecommunications or a novel procedure for the automatic processing of information. Experience has shown that technical factors are often less important than the way the enterprise that is doing electronic commerce manages its funds and keeps track of its overall resources. By modifying the flow of information in the enterprise and by establishing cooperative relations among distinct organizations, EDI forces a reconfiguration of the work flow and a reorganization of the work. This cultural factor, which at first seemed less important in business-to-business exchanges, appears in yet another incarnation.

Nevertheless, in their current state, the different EDI solutions do not seem to be adapted to the conditions of many countries; instead they aim mostly at members of the G-10, particularly the U.S. and Western European countries. However, the use of XML for computer-oriented forms paves the way to real internationalizati^onof the EDI offers.

Finally, security is a fundamental element to encourage the use of an open network for monetary transactions. This fact justifies current research on encryption and the civilian exploitation of results in the military secret services domain. However, technology alone cannot solve the problems of society. The success of a new technique, for example a new means of payment, depends on three aspects — utility, practicality, and meeting the needs of the various participants (buyers, merchants, and bankers). Thus, it is the political and social order that will reflect the various power relations at either the local or the worldwide level.

Possibly related posts: (automatically generated)
Which means of payment?

• Platforms and Convergence Digital Payment Systems (SEMPER) continue...
• Platforms and Convergence Digital Payment Systems (JEPI)
• Electronic Commerce Payment Concern
• Platforms and Convergence Digital Payment Systems (SEMPER)
• Electronic Commerce, Ecommerce, Network and Internet Payment part 2
• Introduction to Web 2.0 Website Patterns
• Platforms and Convergence Digital Payment Systems (CAFE)
• Mobile Challenges
• Web Technology & Ecommerce Online Solutions
• Basic Ethics of Online Marketing Part 4