Payment and the Internet: Issues and research perspectives in economics of banking

Introduction For a long time the question of payments on the Internet was associated with the rise of a new monetary form, electronic money, sometimes issued by non banks. This monetary trend oriented research in the field of monetary economics and prompted some economists and bankers to claim that “central banks would lose their ability to implement monetary policy. The successors to Bill Gates put the successors to Alan Greenspan out of business” (King, 1999: 411) or “the 21st century will see the birth and development of a dematerialized offer of private moneys of which the services, escaping any public regulation, will compete with current fiduciary moneys” (Dorn, 1999: 45). But electronic money is not used today on the Internet (European Central Bank, 2003) and private electronic moneys have completely disappeared, since payments on the Internet are carried out by way of other electronic payment systems (EPS). In view of this situation, the aim of this chapter is threefold. The first objective is to analyze these EPS and to propose an economic analysis of retail payment developments on the Internet. Our chapter shows that EPS form a heterogeneous group that cannot be reduced simply to the evolution of electronic money, and that information technologies in general and the Internet in particular have afforded non banks with opportunities to challenge banking prerogatives to differing degrees: securing the payment order, clearing and settlement, unit of account, etc.