Cover image for Paying with plastic : the digital revolution in buying and borrowing
Paying with plastic : the digital revolution in buying and borrowing
Evans, David S.
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Publication Information:
Cambridge, Mass. : MIT Press, [1999]

Physical Description:
xii, 373 pages : illustrations ; 24 cm
Plastic cards -- From sea shells to electrons -- A land of local banks, awash in paper checks -- The rise of payment cards -- From gourmets to the masses -- Everywhere you want to be, not everywhere they want to be -- Chicken's eggs and other economic conundrums -- System wars -- Issuer brawls -- Puzzles and paradoxes -- The antitrust wars -- Debit takes off (finally) -- And they don't take cash.
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HG3755.8.U6 E94 1999 Adult Non-Fiction Central Closed Stacks

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Over the course of history there have been four major innovations in how people pay for things: metallic coins in ancient times, checks in the Middle Ages, paper money in modern times, and now payment cards. Since Diners Club issued its first charge cards in 1950, payment cards - credit, debit and charge cards - have revolutionized how and when we pay for goods and services. In 1998 US consumers had more than 720 million payment cards, which they could use to pay for goods and services at more than 4 million merchant locations in the United States and another 11 million in other countries.

Author Notes

David Evans is Senior Vice President of National Economics Research Associates, Inc.
Richard Schmalensee is Dean of the Sloan School of Management and the Gordon Y. Billard Professor of Management and Economics at the Massachusetts Institute of Technology.

Reviews 2

Booklist Review

Until recently, "paying with plastic" meant using a credit card. Now "plastic" refers to not only credit cards and charge cards but also debit cards and prepaid transaction cards. Lewis Mandell has already told the history of the credit card in The Credit Card Industry: A History (1990). Now Evans, senior vice president with the National Economic Research Associates consulting group, and Schmalensee, dean at the Sloan School of Management, update the 50-year history of plastic cards to include the revolution in electronic funds transfer systems and banking and the impact of increased competition within the industry. They cover much of the same territory as did Mandell but target a broader audience with eye-catching charts, graphs, and even cartoons. The authors also look at the history of money, but the story of payment cards begins in 1950 with the Diners Club. The struggle to get both merchants and consumers to accept the idea of payment cards and how the network used by such companies as Visa and MasterCard works are described. --David Rouse

Choice Review

Evans (National Economic Research Associates, Inc.) and Schmalensee (dean, Sloan School of Management, MIT) have written the definitive account of the credit card industry, its four major players (MasterCard, Visa, Discover, and American Express), and all the supporting members of the cast (including banks, credit agencies, electronic terminal manufacturers, etc.). They not only describe how the credit card system operates, but also analyze the economic implications of these activities. For anyone who regularly receives unsolicited credit cards in the mail, it is not difficult to believe one of the main premises of the book--the credit card market provides a product that is differentiated along many different dimensions. With respect to differentiation, credit cards are similar to the breakfast cereal aisle in the supermarket; each card user and each card issuer is quite unlike the others. Consumers have differing uses for credit cards, and issuers modify the characteristics of the cards along many dimensions to segment the market. Perhaps the book's only weakness is the scant analysis of the use of plastic in the emerging electronic commerce market; the authors scarcely mention the Internet, and yet electronic commerce is almost exclusively transacted with credit cards. Recommended for a wide audience--public, academic, and professional library collections. B. P. Keating; University of Notre Dame

Table of Contents

Prefacep. xi
Acknowledgmentsp. xv
1 Plastic Cardsp. 1
2 From Seashells to Electronsp. 25
3 More Than Moneyp. 53
4 From Gourmets to the Massesp. 87
5 From Sardi's to Saks.comp. 115
6 It Takes Two to Tangop. 133
7 Co-opetition and the Payment Card Ecosystemp. 159
8 System Warsp. 185
9 Issuer Brawlsp. 213
10 Backroom Battlesp. 247
11 The Antitrust Warsp. 267
12 On the Brinkp. 297
13 And They Don't Take Cashp. 317
Sources and Notesp. 321
Selected Bibliographyp. 345
Indexp. 353