Advertisement

Netnomics

, Volume 2, Issue 1, pp 37–47 | Cite as

Why do stored value systems fail?

  • Andreas Furche
  • Graham Wrightson
Article

Abstract

Stored value systems are the most recent form of electronic payment technology. They are meant to coexist with credit and debit technology, by primarily targeting the low value area of the transaction market. Being targeted at low value transactions, they are designed to have very low transaction cost.

Stored value systems rely on creating a form of electronic value, on smart cards or as computer files. Such value can be bought (withdrawn) at any one time, and spent in arbitrary fractions at later times. When the technology emerged for its first implementations in the first half of the 1990s, it was much celebrated as a replacement for cash with many benefits over existing payment technologies.

Many of these systems have subsequently been set up as trials, and the commercial rollout of some systems has started. However, actual usage of stored value systems is still low, much lower than was expected by the operators of the systems. Several years after the first trials were implemented, it is still unclear whether and when they will play a relevant role in the payments system market. And none of the trials that have been run can be considered a commercial success. This makes it necessary not only to assess the technology, but also the commercial future and user uptake of these systems.

Keywords

Credit Card Smart Card Payment System Card Reader Electronic Payment 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. [1]
    E-Money-The real killer app is digital cash, WIRED Magazine 12 (1994) 174.Google Scholar
  2. [2]
    A. Furche and G. Wrightson, Computer Money-A Systematic Overview of Electronic Payment Systems (Dpunkt Verlag, Germany, 1996; Morgan Kaufman, San Mateo, CA, 1996; DA Information Services, Australia, 1996).Google Scholar
  3. [3]
    Gesetz ueber das Kreditwesen (German Banking Act), Sections 1.(1).11 and 1.(1).12.Google Scholar
  4. [4]
    Implications for Central Banks of the Development of Electronic Money, Bank for International Settlements: Basle (October 1996).Google Scholar
  5. [5]
    The Privacy Committee of New South Wales, Smart cards: Big brother's little helpers, Report No. 66 by the Privacy Committee of NSW (August 1995).Google Scholar
  6. [6]
    US firms to end smart card test, Dow Jones Newswires (5 November 1998). (About negative responses to the large New York smart card trial by Chase Manhattan, Citibank, VISA.)Google Scholar

Copyright information

© Kluwer Academic Publishers 2000

Authors and Affiliations

  • Andreas Furche
    • 1
  • Graham Wrightson
    • 2
  1. 1.Macquarie Graduate School of ManagementMacquarie UniversitySydneyAustralia
  2. 2.Department of Computer ScienceThe University of NewcastleNewcastleAustralia

Personalised recommendations