Plastic Money: Constructing Markets for Credit Cards in Eight Postcommunist Countries

Plastic Money: Constructing Markets for Credit Cards in Eight Postcommunist Countries

Plastic Money: Constructing Markets for Credit Cards in Eight Postcommunist Countries

Plastic Money: Constructing Markets for Credit Cards in Eight Postcommunist Countries

Synopsis

In the United States, we now take our ability to pay with plastic for granted. In other parts of the world, however, the establishment of a "credit-card economy" has not been easy. In countries without a history of economic stability, how can banks decide who should be given a credit card? How do markets convince people to use cards, make their transactions visible to authorities, assume the potential risk of fraud, and pay to use their own money? Why should merchants agree to pay extra if customers use cards instead of cash?

In Plastic Money, Akos Rona-Tas and Alya Guseva tell the story of how banks overcame these and other quandaries as they constructed markets for credit cards in eight postcommunist countries. We know how markets work once they are built, but this book develops a unique framework for understanding how markets are engineered from the ground up-by selecting key players, ensuring cooperation, and providing conditions for the valuation of a product. Drawing on extensive interviews and fieldwork, the authors chronicle how banks overcame these hurdles and generated a desire for their new product in the midst of a transition from communism to capitalism.

Excerpt

Enter a store in the United States. Any store. You will find logos on the products sold in the store. Some logos will be familiar and others will not. The brands will be appropriate to the store: you will find a Nike swoosh in a shoe store but not in a bookshop, and the Kellogg tiger will beckon to you in a grocery but not in a hardware store. There are, however, two logos that will show up in all of these outlets. One will be a four-letter word written in blue italics on a white background, the first letter sporting an orange splash: VISA. The other will feature a Venn diagram of two overlapping circles— one fire-truck red, the other mustard yellow—across which is written, as you might have guessed by now, a compound word with an uppercase C in the middle: MasterCard.

Now go to a foreign country. Any country. You will find the same two logos almost everywhere, from Shanghai to St. Petersburg, Sofia, Szczecin, and Székesfehérvár. The further you stray from the beaten path of globalization, the fewer of these two logos you will encounter, but you will be sur-

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