Cash or Card: Consumer Perceptions of Payment Modes - Scholarly ...

use of borrowed money. The introduction of internet based EMTS reduced the amount of
manual processing and increased the immediacy of transfers. Though the use of cards, linked
to some form of credit facility, dominates domestic (consumer) markets, there is an
increasing acceptance and use of debit/smart cards.
Ultimately gold coins were replaced with paper money and in order to be accepted, early
paper money had to be guaranteed in gold. In effect early paper money (representative /fiat
money) was essentially a promissory note - a promise to pay on demand, which meant that
governments had to physically posses the equivalent amount of gold to the value of the
promissory notes they had issued, in order to be able to make payment on demand should
they be called upon to do so. A person could take his paper note to a bank and demand the
face value be paid to him in gold coin, thus paper money became known as banknotes. For
most of the 19 th and 20th centuries many currencies were based on representative/fiat money
through use of the gold standard.
During the period when paper money was backed by payment of gold on demand by many
countries, and the paper money issued by some other countries was not totally backed by
gold, in order to maintain a balance for the purposes of international trade the Gold Standard
was introduced. The Gold Standard was a complex international arrangement, elements of
which set the value of a nations' currency as a specific amount of gold and guaranteed to
accept gold bullion and coin. It really only became fully achievable with the great nineteenth
century gold discoveries in Australia, North America and Russia. Although the economic
turmoil of the First World War ended the arrangement, efforts to get it going again continued
into the early 1930s.
The shift to representative money required a psychological willingness on the part of the
individual to accept a symbol in place of a physical object and a social willingness on the part
of the collective to evolve organizations and systems of account that could gain and hold the
public trust. In principal however there is nothing to stop governments form printing as
much paper money as they wished, except for the inescapable fact that in doing so, they
inevitably increase inflation within their own country, and devalue their currency on
international exchange markets. While many people still believe their paper money to be
backed by gold this is no longer the case and the only currency with any gold backing today
is the Euro with a token backing of 15% gold.
In the case of commodity money, trust was placed in the inherent value of the metal or other
commodity which constituted the form of payment. In the case of receipt, trust was extended
from the commodity to the social organization that held the commodity (bullion) and issued
the receipts. The shift to representative money required a psychological willingness on the
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