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2016 | OriginalPaper | Buchkapitel

10. Origins of the Modern Concept of a Cashless Society, 1950s–1970s

verfasst von : Bernardo Bátiz-Lazo, Thomas Haigh, David L. Stearns

Erschienen in: The Book of Payments

Verlag: Palgrave Macmillan UK

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Abstract

In this chapter we focus on the emergence of the idea of a “cashless/checkless society” in the 1960s as an example of how futuristic visions often drive new applications long before their economic viability is established. Variants of the “cashless/checkless society” vision appear throughout the developed world during the second half of the twentieth century, but for the sake of clarity and brevity, we will discuss the form it took in the United States from 1950s through the 1970s. As a result we illustrate how consensus that can drive actual technological developments is a key feature of how applications of information technology have been responsible for the increase in productivity of business organizations during the late twentieth century.

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Vorheriges Kapitel Dematerialization and the Cashless Society: A Look Backward, a Look Sideward

Nächstes Kapitel From Teleprocessing to Cashless Payment Technologies: “La Caixa” 1960–2015

Leading in some cases to inconsistencies, such as those of the Star Trek universe. See http://www.sffchronicles.co.uk/forum/16664-money-in-star-trek.html (accessed December 7, 2015).

Robert A Heinlein, Beyond This Horizon (Reading, PA: Fantasy Press, 1948), 3–7. See also the discussion of economics and the role of government on pages 71–72 and 102–3.

Diebold Group. “Summary Report of a Survey on the Impact of Electronics on Money and Credit.”

Norris Lee, “Tomorrow’s Checkless, Cashless Society: the Problems, the Solutions, the Benefits,” Management Review (September 1967): 58–62. Another contemporary study estimated a similar trend but of different magnitude as it stated that approximately one and a half billion checks were cleared in the USA in 1939, and this volume increased to 6.5 billion in in 1950 and to 13 billion in 1960 (Boris Yavitz, Automation in Commercial Banking; New York, 1967, p. 11). Both these estimates concur in identifying a spectacular rise in check volume and activity, with no corresponding increase in the value of deposits, thus placing a severe strain on the US banking system.

This remained true until the passage of the “Check Clearing For The 21st Century Act – Check 21” in 2004.

While the check passed through the clearing system, which could take several days, the depositing institution had to pay interest on the deposited funds and often make some portion of those funds available to the depositor, even though the depositing bank would not receive payment from the check issuer until the clearing process was complete.

These costs were also more pronounced in the USA than in other countries due to the sheer number of banks. In 1966, there were 14,000 banks in the nation, so the likelihood that a check needed to go through the national clearing system was higher than in countries with fewer banks per capita. At the same time the use of personal checks was much higher in the USA than other countries. In Spain, for instance, their penetration as a means of payment remained negligible even after the introduction of check guarantee cards in 1971.

Diebold Group (1966)Summary Report of a Survey on the Impact of Electronics on Money and Credit, New York.

John Diebold, “When Money Grows in Computers,” Columbia Journal of World Business (Nov–Dec 1967): 39–46.

George Mitchell, “Governor Mitchell Considers Tomorrow’s Banking,” Banking (Dec 1966): 33–34. In a parallel development, the narrative of cost reduction to justify capital investments around computer technology was quite common in the early and mid-1960s in several European countries. See further Bernardo Bátiz-Lazo, J. Carles Maixé-Altés and Paul Thomes, Technological Innovation in Retail Finance: International Historical Perspectives (New York: Routledge, 2010).

George Mitchell, “Effects of Automation on the Structure and Function of Banking,” The American Economic Review (vol. 56, no. 1, Mar 1966): 159–166.

Dale Reistad, “The Coming Cashless Society,” Business Horizons (Fall 1967): 23–32. The “reversal” he referred to was a move away from making the processing of paper checks more efficient in favor of completely electronic clearing.

“Checkless Society Check,” Banking (May 1967): 115.

“ ‘Checkless Society’ Moves Toward the Drawing Board,” Banking (August 1967): 93. The chairman of this committee also used the banking and business trade press to sell the visionvision—for example, see Robert L Kramer and W Putnam Livingston, “Cashing in on the Checkless Society,” Harvard Business Review (Sept–Oct 1967): 141–149.

David Stearns, Electronic Value Exchange: Origins of the VISA Electronic Payment System (London: Springer, 2011); The Diebold Group, “Summary Report of a Survey on the Impact of Electronic on Money and Credit” (1967).

Clarke, A. C. and Kubrick, S. 2001: A Space Odyssey (New York: New American Library, 1968).

Baxter, R. and Burke, J., Tomorrow’s World (London: British Broadcasting Corporation, 1970).

The Tomorrow’s World segment “New Banking” was broadcast on December 9, 1969 and can be seen at http://www.youtube.com/watch?v=ccqYKoLbT3I (accessed December 8, 2015).

Tom Fish and Roy Whymark, How has cash usage evolved in recent decades? What might drive demand in the future? September 15, 2015, http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2015/q3prerelease_1.aspx (accessed October 17, 2015).

Bátiz-Lazo, B., Haigh, T., & Stearns, D. (2012, March 29). Visions of a cashless society. http://www.bloomberg.com/news/2012-03-29/visions-of-a-cashless-society-echoes.html. Accessed 22 Apr 2015.

Bátiz-Lazo, B., Haigh, T., & Stearns, D. (2014a). How the future shaped the past: The case of the cashless society. Enterprise & Society, 15(1), 103–131.CrossRef

Bátiz-Lazo, B., Karlson, T., & Thodenius, B. (2014b). The origins of the cashless society: Cash dispensers, direct to account payments and the development of on-line, real-time networks, c. 1965–1985. Essays in Economic and Business History, 32, 100–137.

Bell, S. (2001). The role of the state in the hierarchy of money. Cambridge Journal of Economics, 25, 149–163.CrossRef

Graeber, D. (2011). Debt: The first 5,000 years. New York: Melville House Publishing.

Maurer, B. (2015). How would you like to pay? How technology is changing the future of money. Durham: Duke University Press.CrossRef

Bátiz-Lazo, B. J., Maixé-Altés, C., & Thomes, P. (2010). Technological innovation in retail finance: International historical perspectives. New York: Routledge.

Bátiz-Lazo, B., & Smith, A. (2016). The changing industrial organization of epistemic communities during Hong Kong’s progression towards a cashless society (1960s–2000s). IEEE Annals in the History of Computing, 38(2 (Apr–Jun)), 54–65.

Checkless Society Check. (1967, May). Banking, p. 115.

‘Checkless Society’ Moves Toward the Drawing Board. (1967, August). Banking, p. 93.

Diebold, J. (1967, Novovmber–December). When money grows in computers. Columbia Journal of World Business, 39–46.

Fish, T., & Whymark, R. (2015). How has cash usage evolved in recent decades? What might drive demand in the future? http://www.bankofengland.co.uk/publications/Pages/quarterlybulletin/2015/q3prerelease_1.aspx. Accessed 17 Oct 2015.

Heinlein, R. A. (1948). Beyond this horizon. Reading: Fantasy Press.

Kramer, R. L., & Putnam Livingston, W. (1967, September–October). Cashing in on the checkless society. Harvard Business Review, 141–149.

Lee, N. (1967, September). Tomorrow’s checkless, cashless society: The problems, the solutions, the benefits. Management Review, 58–62.

Mitchell, G. (1966a, December). Governor Mitchell considers tomorrow’s banking. Banking, 33–34.

Mitchell, G. (1966b). Effects of automation on the structure and function of banking. The American Economic Review, 56(1), 159–166.

Money in Star Trek. SFF Chronicles. http://www.sffchronicles.co.uk/forum/16664-money-in-star-trek.html. Accessed 7 Dec 2015.

New Banking. (1969). Tomorrow’s World. http://www.youtube.com/watch?v=ccqYKoLbT3I. Accessed 8 Dec 2015.

Reistad, D. (1967, Fall). The coming cashless society. Business Horizons, 23–32.

Stearns, D. (2011). Electronic value exchange: Origins of the VISA electronic payment system. London: Springer.CrossRef

The Diebold Group. (1966). Summary report of a survey on the impact of electronics on money and credit. Ann Arbor: The University of Michigan.

The Diebold Group. (1967). Summary report of a survey on the impact of electronic on money and credit. Ann Arbor: The University of Michigan.

Yavitz, B. (1967). Automation in commercial banking. New York: Free Press.

Titel: Origins of the Modern Concept of a Cashless Society, 1950s–1970s
verfasst von: Bernardo Bátiz-Lazo
Thomas Haigh
David L. Stearns
Verlag: Palgrave Macmillan UK
Buch: The Book of Payments
Print ISBN: 978-1-137-60230-5

Electronic ISBN: 978-1-137-60231-2

Copyright-Jahr: 2016
DOI: https://doi.org/10.1057/978-1-137-60231-2_10