The latest edition of Wired Magazine has a feature on new hi-tech alternatives to credit card and cash payments. It’s interesting for its criticism of the credit card companies, arguing that they are charging increasingly exorbitant fees for a payments infastructure which is increasingly cheap to maintain.
“It seems really odd that credit card companies can continue to charge a tax on the economy,” says Aaron Patzer, founder of the financial management service Mint.com, which is now owned by Intuit. “Outside the US government, they are the only entity that has the power to levy a fee across virtually every transaction. Maybe that made sense in the early 1960s, when computer infrastructure was expensive and proprietary. But now, with cheap bits everywhere, the actual cost to do a transaction is pennies.”
This is an interesting point from the STN perspective – you could argue that credit card companies are using their position to impose a levy on payments – essentially a tax on exchange.
The rest of the article is interesting as well, mainly for its discussion on emerging monetary technologies and the potential to skirt around existing institutional limitations, reducing the ‘friction’ in the money supply.
