TY - JOUR

T1 - The Ascent of Plastic Money

T2 - The International Adoption of the Bank Credit Card, 1950-1975

AU - Batiz-Lazo, Bernardo

AU - del Angel, Gustavo

PY - 2018

Y1 - 2018

N2 - This paper studies the genesis and early international expansion of the bank-issued credit card – an American innovation that quickly took hold in Western Europe. Empirical evidence undermines the proposition of a single firm building a proprietary network. In fact it was a constellation of participants who combined three characteristics, namely, a critical mass of both retail customers and retail merchants; the capacity to implement new technological solutions; and the ability to forge resilient collaborations across national borders. This evidence endorses the value of collaboration in retail financial services as means of appropriating network externalities. Moreover, other conceptual and empirical studies, especially those based on two-sided markets; neglect the greater implications that initial conditions in this industry have on long-term success.

AB - This paper studies the genesis and early international expansion of the bank-issued credit card – an American innovation that quickly took hold in Western Europe. Empirical evidence undermines the proposition of a single firm building a proprietary network. In fact it was a constellation of participants who combined three characteristics, namely, a critical mass of both retail customers and retail merchants; the capacity to implement new technological solutions; and the ability to forge resilient collaborations across national borders. This evidence endorses the value of collaboration in retail financial services as means of appropriating network externalities. Moreover, other conceptual and empirical studies, especially those based on two-sided markets; neglect the greater implications that initial conditions in this industry have on long-term success.

KW - Credit card

KW - Payments

KW - Cashless

KW - Two-sided markets

KW - Payment tolls

KW - Bank of America

KW - Barclays

KW - Banamex

KW - Bancomer

KW - Banco de Bilbao

KW - British banks

KW - Mexican banks

KW - Spanish banks

U2 - 10.1017/S0007680518000752

DO - 10.1017/S0007680518000752

M3 - Article

VL - 92

SP - 509

EP - 533

JO - Business History Review

JF - Business History Review

SN - 0007-6805

IS - 3

ER -