From: Robert Hettinga <rah@shipwright.com>
Date: Fri, 24 Jan 1997 13:14:19 -0800 (PST)
To: cypherpunks@toad.com
Subject: Online Spending with Smart Cards and E.Cash to To US$3.5bn by year 2000
Message-ID: <199701242114.NAA07699@toad.com>
MIME-Version: 1.0
Content-Type: text/plain



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Date: Fri, 24 Jan 97 00:04:40 +0100
To: dcsb@ai.mit.edu
Subject: Online Spending with Smart Cards and E.Cash to To US$3.5bn by year
2000
Cc: nelson@media.mit.edu.geer@OpenMarket.com
From: a9050756@unet.univie.ac.at (Mike Alexander)
Sender: bounce-dcsb@ai.mit.edu
Precedence: bulk
Reply-To: a9050756@unet.univie.ac.at (Mike Alexander)


>>[some Fed reserve guy's] argument for stored value cards is that the
>>business costs of handling cash are so substantial that there is room
>>for merchants to discount purchases when made by a means that does
>>not require that handling cost.
>
>Does anyone know of a source for information on the overhead of
>accepting various forms of payment? I assume the cost of cash is
>smaller than credit cards for purchases under, say, $500. Any
>estimates on smart cards? On pure digital cash (delivered via a
>browser)?
>
>I'm particularly interested in micropayments, but the larger question
>is interesting as well.

I've worked on this topic extensively in the past months (writing a doctoral
thesis on efficiency and risk in the payment system). I can assure you this:
cash in is still and will remain one of the most efficient payment
instruments.
This holds looking at it from a private as well as social cost perspective
with
sufficient empirical support.



Best Regards,

Michael Alexander
Doctoral Student at the University of Vienna

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-----------------
Robert Hettinga (rah@shipwright.com), Philodox
e$, 44 Farquhar Street, Boston, MA 02131 USA
"The cost of anything is the foregone alternative" -- Walter Johnson
The e$ Home Page: http://www.shipwright.com/rah/
FC97: Anguilla, anyone? http://www.ai/fc97/
"If *you* don't go to FC97, *I* don't go to FC97"