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Why has stored-value not caught on?

Sujit Chakravorti

Journal of Financial Transformation, 2004, vol. 12, 39-48

Abstract: Why have general-purpose stored-value cards been unsuccessful in penetrating the U.S. market? Three necessary conditions for a payment instrument to be successful are discussed: consumers and merchants need to be convinced of its advantages over existing payment alternatives for at least some types of transactions; payment providers must convince consumers and merchants simultaneously of its benefits to achieve critical mass; and assure them that adequate safety and security measures have been implemented. This article discusses the credit card industry’s success in meeting these necessary conditions and general-purpose stored-value issuers’ failure to meet them to date.

Keywords: Payment Cards; Stored Value; Consumer Finance (search for similar items in EconPapers)
JEL-codes: D53 G21 L11 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (4)

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Journal Article: Why has stored value not caught on? (2000)
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