[lug] Credit - was: [Letting folks pay from the web.]

[Rob Nagler]

Jeffrey Haemer writes:
> interest, but I started the thread, so I keep reading it. :-)

Silly person.

> On this item, I'll dip my toe back in because I know a related technical
> trivium.  I've been told that a reason credit cards spread faster through
> America than elsewhere was also a reason cell phone adoption was slower:
> landlines everywhere else sucked.

I lived in CH from '86-98.  I saw some rise of CCs and debit cards,
but cash was king for the entire time I was there.  At that time, CCs
took off in the US.  Cell phone adoption was about the same rate as
the US afaik.

Nobody can know for sure, but the fact that using 100 and 1,000CHF
denomination notes were extremely common.  You could accept these
bills withut fear, because they had metal wires, watermarks, different
sizes, etc.  I would argue that the slow adoption of
anti-counterfeiting technologies in the US helped speed the adoption
of credit cards.  Today, you can maybe pay with a $100, but you can't
pay with $1,000 or $500, because they don't exist.  BTW, the Swiss
were world leaders in money printing technology.  Orell-Fuesli had
quite a book of business in third world countries when I was living
there.

Another factor is the quality and orientation of the existing
electronic payment systems in CH.  They use the "Giro" approach, which
is what I would call debtor-based, that is, the debtor initiates the
transfer.  This is much more secure than giving out credit-slips
(IOUs, checks, whatever) as we do in the US.  This requires the
creditor to initiate the transaction, and as we know, leads to a lot
of fraud, because there's no good way to know if a check is forged.
Many businesses no longer accept checks for a reason.  The
check-system in the US was built on trust (which was never really
there, but nice to assume) so it costs a lot when a check bounces.  A
giro can't bounce, because it's got money attached to it as soon as
the debtor initiates the transfer.  With credit cards, the merchant
pays insurance on each transaction, which is a reasonable way to do
it.

Rob