Alya Guseva, Akos Rona-Tas

Plastic Money

Constructing Markets for Credit Cards in Eight Postcommunist Countries

• Gebundenes Buch

Produktbeschreibung

Plastic Money tells the story of how banks constructed markets for credit cards in eight postcommunist countries: Czech Republic, Hungary and Poland, Bulgaria, Russia, Ukraine, China and Vietnam. Chronicling the institutional and cultural challenges that had to be overcome in order to generate demand, this book places the rise of consumer credit in the context of transitions from communism to capitalism.

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Produktdetails

• Verlag: Stanford University Press
• Seitenzahl: 344
• Erscheinungstermin: 26. Februar 2014
• Englisch
• Abmessung: 236mm x 159mm x 25mm
• Gewicht: 583g
• ISBN-13: 9780804768573
• ISBN-10: 0804768579
• Artikelnr.: 40109351

Autorenporträt

Akos Rona-Tas is Associate Professor of Sociology at the University of California, San Diego and Research Associate at Met@risk, INRA in Paris. He is the author of The Great Surprise of the Small Transformation. Alya Guseva is Associate Professor of Sociology at Boston University. She is the author of Into the Red.

Inhaltsangabe

> Plastic Money: Constructing Markets for Credit Cards in Eight
Postcommunist Countries
Author(s): Akos Rona-Tas and Alya Guseva
This book draws on original fieldwork to provide a comparative analysis of
emerging credit card markets in eight countries-the Czech Republic,
Hungary, Poland, Bulgaria, Russia, Ukraine, China and Vietnam. The problem
of market emergence is posed as analytically distinct from market
functioning. Card markets are viewed as being actively constructed, rather
than emerging spontaneously and following the US blueprint. The process of
market construction involves solving a set of puzzles related to the credit
card as a product that is both a means of payment and an instrument of
credit. These puzzles are: standardization, information asymmetry,
information sharing, market origination and expansion. They were solved
differently in each of the countries, and the resulting markets are neither
identical to the "Western" blueprint, nor to each other. The book focuses
on the trajectories of market development in the eight countries from the
moment the first cards were issued to the present time, underscoring both
similarities and differences between countries.
>
Chapter 1: Paying with Cards
Chapter abstract:
This chapter establishes market emergence as a problem analytically
distinct from market functioning and introduces two sets of rules:
generative and functional. Credit cards are conceived of as global products
that are both a means of payment and an instrument of credit. Frequent
references to the US credit card market are justified by its role as a
performative ideal type-a model that not only helps to explicitly describe
postcommunist credit card markets but also attempts to shape them by
imposing a set of implicit instructions. The chapter provides the basic
statistics of payment card markets in the eight postcommunist countries and
concludes with an overview of the remaining chapters.
>
Chapter 2: The Transition from a Communist to a Market Economy
Chapter abstract:
This chapter lays out the historical background for the development of
postcommunist card markets. It revisits theories of the transition,
focusing on the three distinct development paths the economies of the eight
countries took: the path taken by the Central European countries, which
started with an economic recession but soon integrated into the European
Union and the developed world; the path navigated by the economies of East
Europe, which experienced more tumultuous and protracted transition and a
slower European and global integration; and the path traveled by China and
Vietnam, two fast-growing East Asian economies that started from an overall
much lower level of economic development keeping a strong role of the
Communist state in the economy. The chapter discusses the creation of
commercial banks and emphasizes the similarities among the countries'
developmental paths. It also criticizes the market transition theories for
ignoring the demand side of market building.
>
Chapter 3: Payment Puzzles
Chapter abstract:
This chapter presents how card markets work. It lays out the puzzles
encountered by the architects of credit card markets and explains why they
pose challenges to standard understandings of market economics. In line
with the argument that credit cards combine the features of two products,
payment cards and consumer loans, here the focus is on two payment puzzles:
two-sided markets and standardization. It is argued that these puzzles are
such that they cannot be effectively solved by a self-regulating
competitive market driven by the forces of supply and demand in the pursuit
of ever-increasing profits. Instead, the solutions to these puzzles require
some sort of nonmarket intervention. The chapter concludes with a short
account of how each of the two puzzles was solved in the American payment
card market, as well as gives a brief preview of solutions used in the
postcommunist countries.
>
Chapter 4: Credit Puzzles
Chapter abstract:
This chapter continues the discussion in the previous chapter focusing on
the puzzles related to the consumer loan side of the credit
card-information asymmetry, information sharing and market origination and
expansion. It concludes with a short account of how each was solved in the
American payment card market and presents a brief preview of solutions used
in the postcommunist countries.
>
Chapter 5: The Construction of Card Markets in Hungary, Poland and the
Czech Republic
Chapter abstract:
This chapter focuses on the three Central European countries-Hungary, the
Czech Republic and Poland. It details the role of multinational card
networks, such as Visa and MasterCard, as well as the involvement of state
and large employers in solving the market puzzles. On the credit side,
market development in Central Europe was influenced by concerns about data
privacy. The mechanization of credit assessment, a key technology in making
credit card markets profitable, was seen as a threat to borrowers. On the
payment side, all three Central European markets are already dominated
almost exclusively by Visa and MasterCard. In order to further standardize,
the European Union recently began to push for initiatives enabling any
European citizen to get their payment card in any European country.
>
Chapter 6: Russia, Ukraine and Bulgaria
Chapter abstract:
The chapter focuses on how card markets were constructed in Russia, Ukraine
and Bulgaria. The unique features of these markets are: a substantially
large "gray" (cash) economy, which gave merchants a strong preference for
cash over cards; complicated income verification of credit applicants; and
dialogue about creating national payment systems based on domestic cards.
The spread of coercive cards via salary projects is now accompanied by
pressures to legally mandate card acceptance by merchants. Card issuers
appear to be powerless in the face of several puzzles-they are either
defeated by the resistance of salary cardholders to use cards for payment
and by the refusal of merchants to accept cards, or they are paralyzed by
the inability of the banking community to control competitive tendencies in
favor of greater cooperation over standards and information. This
emphasizes the key role of the state in constructing markets.
>
Chapter 7: Vietnam and China
Chapter abstract:
This chapter focuses on China and Vietnam-two countries whose political
context and transition trajectory differ from those of the other six. The
case of China deserves special attention due to the country's sheer size:
it is particularly challenging to create a credit card market in a country
of more than one billion people, only a small number of whom have bank
accounts. Establishing cooperation between banking institutions thousands
of miles apart is equally challenging. The Chinese government views cards
not as a market, but as part of China's payment system. It has been
successful in developing its domestic card system that poses challenges to
multinationals not only domestically, but also internationally. The
Vietnamese market is the least developed of all eight countries. Its retail
banking covers an even smaller percentage of the population than the
banking system in China, and its IT infrastructure is even more inadequate.
>
Chapter 8: Conclusion
Chapter abstract:
The conclusion highlights the common problems that market makers in all of
the countries faced, but it also emphasizes the differential successes and
sometimes different paths and sequences of events that accompanied the
development of card markets in the eight countries. It also notes that in
several of the countries, most unambiguously in China, the central purpose
of the card market shifted from providing a tool of convenience to
customers to offering an instrument of economic control for the state. The
discussion then turns to theoretical issues of social order and market
emergence, and emphasized the implications of this analysis for the study
of globalization, postcommunist transitions and markets