Electronic Cash and the Innovation Process: A User Paradigm
Lara Srivastava and Robin Mansell
Abstract
This paper looks at the innovation process in an emerging service
product in the financial sector. The role of banks in the development
and diffusion of electronic cash is addressed in the context of
their role as 'lead users'. Since the introduction of Electronic
Funds Transfer (EFT), banks have been learning how to manage large
amounts of detailed information about money. Merchants, consumers
and banks transact mainly through the use of various information
and communication technology systems. One of the most important
developments in this area has been the advent of the Internet and
the opportunity for direct electronic ordering and delivery. Electronic
commerce, however, has yet to overcome a major obstacle to its proliferation,
that is, a suitable and instantaneous means of payment. This paper
examines electronic cash and its generation, diffusion and take-up
in the economy. Electronic cash is a store of monetary value, held
in digital form, which is available for immediate exchange in transactions.
The paper considers electronic cash in terms of its suitability
to the Internet and as an off-line payment method and analyses the
sources of investment in electronic cash and the willingness and
capability of the financial services industry to pave the way for
its deployment. The results show that banks have the know-how and
the need to innovate in this field. They are user-initiators as
well as suppliers of electronic cash and play the role of a need-forecasting
laboratory. The obstacles they face in terms of the lock-in of traditional
operations are not very significant.
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This paper is currently © L Srivastava & R Mansell
1998
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