Standardising Electronic Means of Payment

Abstract

In this paper it is discussed whether electronic means of payments should be standardised. Having answered this question affirmatively, it is analysed which form of standardisation will be appropriate. Three forms are discussed: Standardisation by market forces, by co-operations among firms and by state intervention. The result is that it is possible to solve the standardisation problem with co-operative firms or market forces. The question is, however, whether these solutions are compatible with a competitive market. State intervention in the form of prescribing basic technical standards and enforcing interconnection might be required to ensure the efficiency of the EPS market. A state monopoly with electronic money is not appropriate because it tends to be dynamically inefficient and to have problems with cost control.