The case for EFTS

Abstract

Do we want electronic funds transfer? Can we afford it? What's wrong with existing payment systems — cash, cheques and credit cards? These are some of the starting‐off points in a major research project into the impact of micro‐electronics on the banking and retail sectors carried out by the authors of this article during 1981. Interviews were carried out with around 200 people from 150 organisations — banks and major retailers, mostly supermarket groups, department stores, and multiples. Existing payment systems are of course expensive — and cumbersome and insecure. But there are three sets of needs to be considered: not only those of the banks, but also those of the retailer and the consumer. The researchers found that these three parties don't all want the same things, but what is apparent is that the existing payment systems are, in general, acceptable for the retailer and the consumer, but not for the banks. They provide banks with major problems and considerable costs. The researchers conclude: “We did not find the case for EFT proven beyond reasonable doubt.” Such a system has advantages, but the costs would be likely to be paid for by the consumer — for whom the benefits are not very pleasant. Their view is that it is more likely to be the 1990s rather than the 1980s before a total system of on‐line EFT is firmly established. The views expressed in this special feature are those of the authors and not necessarily those of the Policy Studies Institute.