Roger Clarke's Issues in Electronic Payment
Roger
Clarke
Version of 26 December 1995
© Xamax Consultancy Pty Ltd, 1995
This document is at http://www.rogerclarke.com/EC/EPMIssues.html
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The
Introduction
to the topic suggests that considerable research is needed into electronic
payment mechanisms and their impacts and implications.
What sorts of issues arise? This document's purpose is to identify the
dimensions, and some of the specific matters needing attention.
The issues are organised under the following headings:
To provide feedback, please
email
to the convenor, Roger Clarke, using the subject heading EPM (to ensure
that my email filter places it in the right in-tray).
- What are the characteristics of payment mechanisms that are of greatest
concern to users, including organisations large and small, and consumers rich
and poor?
- Will the present diversity of payment methods be reduced to a small number
of electronic ones?
- What is the set of features that will lure consumers away from relatively
expensive cash electronic payment forms that (at least for the merchant and
financial institution) are cheaper and more convenient?
- Are the new mechanisms utterly dependent on the sanctity and claimed
impenetrability of 'hard' cryptography? Will the discovery of crypto-cracking
techniques destroy their credibility, or will they be accepted provided that
the degree of security they offer is roughly comparable to conventional payment
methods?
-
- Will there be substantial impacts on the numbers of accounting staff
employed by organisations?
- Will there be substantial impacts on the numbers of customer interface
staff employed by financial institutions, particularly at branch level?
- Will financial institutions be forced to abandon their branches? Will
those kinds of financial institutions that have traditionally been close to
their clientele (such as credit unions and Raiffeisenkassen) be forced by
cost-pressures to close their doors?
- Will small and medium enterprises be harmed or helped by the new payment
mechanisms?
-
- Will electronic payment mechanisms lead to a concentration of market-share
in the hands of mega-financial services corporations, or will smaller, more
fleet-of-foot companies gain at the expense of the established operators?
- What opportunities do these new payment methods provide to corporations
generally?
-
- To what extent will the structure of the financial services sector be
changed? Will there be an increase in financial services intermediaries (such
as) MasterCard and Visa, and, if so, will they also be industry-owned, or will
they be for-profit corporations?
- Will conventional banks and non-bank financial institutions be directly
challenged by new entrants to the financial services industry, including new
forms of corporation spawned from what are currently called telecommunications
suppliers, cable-TV providers, value-added network operators, on-line services
and Internet services providers?
-
- How can fair play between corporations be ensured? Will corporations be
so suspicious of one another and of financial services institutions that all
payment mechanisms will need to effect immediate transfer of the funds?
- How can appropriate behaviour of financial services providers be ensured?
Will governments and national central banks retain sufficient power and
credibility that they can regulate corporations' behaviour? Will industry
associations increase in power and bolster the falling credibility of central
banks? Or even fill the regulatory vacuum left by their demise?
- How will governments levy taxes on electronic funds flows, particularly
over open networks like the Internet, particularly after the deployment of hard
cryptography by corporations that consider taxation to be a constraint on
business?
-
- Will governments lose control of cash manufacture, and hence their
considerable interest revenue from seigniorage? If so, will that make a
significant difference to budgets?
- Will governments suffer a significant loss of their tax-base, as payments
migrate from monitorable and therefore taxable mechanisms to
extra-jurisdictional mechanisms? If so, will governments retract the services
they provide, run even larger deficit budgets, find new ways to levy taxes,
and/or increase existing rates still further? Whatever they do, will their
revenue-gathering be effective, and will it be perceived to be equitable?
-
- Will electronic payment mechanisms result in complete transparency of
consumers' economic behaviour, enabling marketers to manipulate them to a yet
greater extent? Or will it be relatively easy to hide or obscure one's
transaction trail?
- Will electronic payment mechanisms result in complete transparency of
people's behaviour generally, opening them up to greater oppression and
repression by government agencies and other organisations which seek to
influence their behaviour? Or will it be relatively easy to hide or obscure
one's transaction trail?
-
- Will the supra-national nature of electronic payment mechanisms result in
the nation-state becoming a fleeting footnote in social history, roughly from
1870 to 2020?
- If so, what will be the dominant pattern that emerges: the multi-national
blocs of George Orwell's '1984'? Those of the advertising rhetoric of the
European Union? A pan-world government (League of Nations Mark III)? Multiple
local governments run by alternative semi-criminal organisations (like the
multiple 'mafias' competing with nominal local governments in contemporary
Russia)? Or will the future be more like the anarchy foreseen by cyberpunk
sci-fi authors?
Created: 26 December 1995 -
Last Amended: 20 November 1997
by Roger Clarke
- Site Last Verified: 15 February 2009
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