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

commodity (bullion) and issued the currency. Representative money made possible the
practice of fractional reserve banking, in which bankers would print and mint currency in
excess of the amount of actual precious metal on deposit. The shift to representative money
required a psychological willingness on the part of the community to accept it as a symbol of
the metal on deposit 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. For this
system to function, consensus (within the community) that the paper money and coins equate
to the agreed value of such metals is required. Though paper money and coins are no longer
linked to gold there is still consensus that they are a tangible representation of value (Bordo,
1981).
In the domestic market, day to day transactions were primarily via coins (and by the 19th
Century, paper notes); the value of which, in modern societies, is set by government treasury
officials. By the 20th Century the use of cheques in the domestic market became widespread.
The use of cheques allowed a time distance between the purchase and delivery of payment
and removed the experience of a tangible exchange of paper notes and coins. When banks
made credit available to their customers in the form of a bank credit card, like cheques these
payment forms involved manual processing, delayed debit and the use of borrowed money.
The introduction of Internet-based electronic money transfer systems (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.
2.4: Electronic Money Transfer System (EMTS)
A cashless payment system is dependent on specific instructions governing the transfer of
funds from one account to another. EMTS can utilise web based technology, card based
information or radio frequency identification (RFID) devices, (usually attached to cellular
phones) to direct instructions. Card based systems allow access to accumulated and/or
borrowed funds and take three forms - debit, smart and credit cards:
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