From: p.v.mcmahon.rea0803@oasis.icl.co.uk
Date: Sat, 27 Aug 94 13:54:13 PDT
To: hughes@ah.com
Subject: RE: In Search of Genuine DigiCash
Message-ID: <9408272055.AA25221@getafix.oasis.icl.co.uk>
MIME-Version: 1.0
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>    >If there were already a fully identified digital money system,
>    Is there one?
> 
> I don't think there is any digital money system at all, neither
> anonymous nor fuly identified.
> 
> There certainly are digital funds transfer systems, almost all fully
> identified.  These are not digital money systems, although they may be
> precursors.

Clearly there is existing practice in vendor-supplier EDI - but most
financial service organisations have not yet even been able to cost-justify
electronic processing of remittance information (for which the
manually-shipped lockbox is deemed adequate ...)

 
>    Eric, for the last three months, you have said that there was no way to
>    prove whether digital cash was more cost effective than other forms of e$,
>    and thus potential efficiency was useless as an economic argument for its
>    adoption.
> 
> I still agree that you cannot really _prove_ that it will be more
> efficiently, at least not from armchair business planning.  Given a
> few million for a good study though, I'm sure answers might be
> forthcoming.

There has to be a business reason for change to any existing practice;
a general infrastructure for electronic payments is not going to be
adopted by banks just because there are available or emerging technologies.

One agent for change *may* be threat to the banks through extension of
existing EDI arrangements to include transmission of remittance data
on a bilateral or hub-spoke basis. The attractions of a fast growing
(albeit currently 500m USD) servide provider market, and real concerns
about loss of business, have spurred the establishment by partnerships
of banks of a number of check and remittance data clearing houses. 

With the increase in the number of trading partners, and the 
opportunity for the banks' commoditization of the electronic financial
transaction, there may be benefit in marketing an electronic "cash"
product - even if it's not transferable. But technology underlying 
this may be little more than an extension of existing solutions unless
there are compelling countervailing business reasons to change.

[Consider: who bears the cost burdens of the status quo with increasing
use of EDI by business + (mostly) manual remittance mechanisms? What will
drive this status quo to alter ...?]

- pvm