Centre for International Research on
Communication and Information TechnologiesThe Social Impact Of Electronic
Money In Australia: Residential Users'
Perspective On Electronic Commerce by Supriya SinghSenior Research Fellow,
CIRCITLevel 14, 300 Flinders Street, Melbourne 3000, Australia
Tel: (613) 9248 1175 Fax (613) 9248 1170
email: ssingh@circit.vut.edu.au





Presented at the Twenty-fourth Annual Telecommunications Policy Research
Conference, Solomons, Maryland, October 5-7 1996





Abstract
In this paper I analyse the social and cultural meanings of electronic
money from the perspective of the residential user and show how these
understandings are critical for the providers and regulators of electronic
commerce. Drawing on two qualitative
Introduction1 In the discussion of electronic commerce, little is being
said about the way the residential consumer uses or will use electronic
money to pay for goods and services purchased on-line. There has also been
no consideration of the social a

This paper is framed within the users' perspective and the study of money
as a social and cultural phenomenon. The users' perspective focuses
attention on the way people pay for goods and services, rather than the
technologies underlying the new electr
The sociological study of electronic money from the users' perspective
helps shift the focus of providers and regulators of electronic commerce
from the convergence of digital technologies to examining how these
technologies increase the diversity of
In this analysis of electronic money I draw on two sociological studies of
money among middle-income Anglo-Celtic2 Australians. The first is part of
a broader study of the use of information and communication technologies
(ICTs) in the home (Singh, Bow
In the first part of this paper, I detail how the users' perspective
changes the questions and the idiom of discussion in electronic commerce.
In the second part, I examine the qualitative data to show how people
match the information yielded by forms
Part 1 The Users' Perspective
Providers of electronic goods and services recognise the value of the
users' perspective for profitability and growth. But the move to this
perspective involves a major shift in the questions that are asked. As
Dervin (1992) points out:
Almost all our current research applies an observer perspective. We ask
users questions which start from our worlds, not theirs: What of the
things we can do would you like us to do? What of the things we now offer
do you use?... The difficulty is that
The research on information and communication technologies (ICTs) in
general and on-line services in particular, places the technology, service
or application at the center. The questions for instance are: How do you
use the plastic card? How will you
This perspective is important in charting the growth of new technologies.
However, if this picture is not complemented by one that places the user
and his or her activities at the center of questioning, it can make for
costly misjudgments. Figure 2 rep
The users' perspective alters the framework and direction of questioning.
These new frameworks and questions have to be painstakingly discovered by
listening to consumers talk of their lives, for much of the public debate
is couched in the terms seen i
How do people "mix and match" different forms of money?
How do forms of money match different kinds of money and payments?
How does the timeliness, range, record and context of information help
match forms and kinds of money?
How do people deal with Internet money which is virtual and impersonal?
What factors contribute to a person's trust in the on-line information
and system?
How does the use of electronic money shape and be shaped by social
relations and cultural values?
8. How does the cultural distinctiveness of money impact on the global
usage of electronic money?

Figure 1: The Providers' Perspective: The Technology Approach



Figure 2: The Users' Perspective: The Activity ApproachIn the
following section, I show how these questions from the users' perspective
helps in understanding how people use money.


Part 2 Use of forms of money
In order to illuminate the way people use money, one has to go beyond the
use of payment instruments such as cash, checks and plastic cards and
transaction modes such as branches, ATMs (Automated Teller Machines) and
EFTPOS (Electronic Funds Transfer a
Forms of money can be broadly grouped as physical and electronic,
depending primarily on the transaction medium used. Physical forms of
money include physical payments instruments and physical transaction
media. They comprise cash and checks transacted
The categories of physical money and electronic money are ideal types.
When one speaks of electronic money, there is the assumption that it is
virtual money, that is, it is not physical, it is not tangible and cannot
be held and touched. This is true i
Thinking in terms of the various forms of money has two results. First, it
reminds one that payments have not always been transacted, even in the
past, solely within the banking system. Australia Post for instance claims
to be Australia's "biggest ove
2.2. Mixing and matching forms of money
A focus on the ways Australians pay for goods and services, shows that
cash, checks and the branch remain the central payments and transactions
mechanisms. The macro picture shows that despite a fast rate of growth in
electronic payments and transactio
Cash remains the most popular and convenient way of paying for everyday
transactions of small value in Australia. It is estimated that some 90 per
cent of the number of transactions are in cash (Bank for International
Settlements, 1994, p. 8).
The check is the most popular form of non-cash payment in Australia. In
1995, its volume (38 percent) exceeded that of credit cards (10 percent)
EFTPOS (13 percent), ATM (17 percent), direct entry credit (18 percent)
and direct entry debit (4 percent)
Though high-value electronic funds transfer is now for the first time
higher in value (63 percent) than checks (35 percent), checks continue to
dominate over retail low value electronic funds transfer which remain
unchanged between 1991 and 1995 at 2 p
Payment by cards is increasing, but it still comprised only 0.1 percent of
cashless transactions in value, and 15.4 percentage by volume (Bank for
International Settlements, 1994, pp. 46, 48)
The number of ATMs and EFTPOS outlets is increasing in Australia. However
60 to 66 per cent of all banking transactions are still conducted through
branches (Head, 1996a & 1996b).


It is difficult to go beyond this picture to detail the use of these
different payment and transaction mechanisms. As the Australian Payments
System Council notes in its latest 1994-1995 Annual Report, "there is
limited detail on the relative usage by
An estimated one tenth of Australian adults have no bank accounts (Singh,
1992);
Nearly a fifth (18 %) of Australian adults have no credit cards (Kavanagh,
1996). The Marriage Money study shows that two-thirds of the low income
Non- English speaking background persons with literacy difficulties had no
electronic access. Only 17 perc
Though household ownership of PCs is rising fast, only 20-40 per cent of
households have PCs, whereas only 6 per cent have modems (Singh, Bow and
Wale, 1996).
Poor access to bank branches and ATMs is also a limiting factor in some
rural areas. The Money On-line study shows this is pushing people more to
the use of EFTPOS and checks. Checks cashed at grocery stores or service
outlets continue to be an import

These socio-economic factors are however less useful for understanding how
people with access, use physical and electronic forms of money. The Money
On-line study shows that even the early adopters of the new technologies
continue to mix and match dif
Checks and cash across the counter are the most popular way of paying for
bills;
Physical cash is most often the only acceptable form of money for both the
merchant and the consumer, for incidental expenditure such as parking,
photocopying, buying items of small value. It is also the form of money
most associated with gambling in A
Direct debit via a standing instruction with a financial institution is
the preferred way for paying for periodic payments such as the mortgage;
Checks and plastic cards across the counter or EFTPOS direct are used for
tax deductible expenditure;
The credit card, where possible, is the preferred way of paying for large
items of discretionary expenditure;
Internet plastic is at times used for paying for books, CDs and software
ordered over the Internet.
This leads to the next question: What makes one form of money more
generally suitable for a particular kind of payment?

2.3. Information, Forms of Money and Kinds of Money
In this section, I argue that one of the important reasons for the
congruence between forms and kinds of money is that forms of money yield
information that is required for different payments and income streams.
The important dimensions of information
"Real" cash, that is cash obtained from branches and paid in a person-to-
person transaction, gives immediate information about money spent or
received and money in hand or still in the account. It can yield a
discretionary record in that one can ask f

Checks differ from cash in that with a check you do not immediately get
informed by the bank about the money still in the account. But with a
check payment, you can prove to the authorities or the recipient, that you
did send the check and if it is cas
Check and credit card payments over the counter add the physical and
personal context to the transaction. The plastic card transacted by mail,
phone or fax does not have this physical and personal context, but it does
yield a discretionary record such


Figure 3 Information Dimensions of Forms of Money

Information Dimensions
Forms of MoneyTimeRangeContextImmediate RecordImmediateRetrospectiveMoney
spent or receivedMoney in hand or still in
accountPersonalImpersonalPhysicalVirtualEvidentialDiscretionaryUntraceableR
e al cashYYYYYYYATM cashY

3.1 Internet Money is a New Form of Money
Internet money is e-cash, electronic checks and plastic cards transacted
over the Internet. It differs from most earlier forms of money in that it
is both impersonal and virtual. It is impersonal as there is no
identifiable person at the other end of t
In other respects, Internet money gives the same kind of information as
its physical counterparts. It gives immediate information about money
spent or received. E-cash like "real" cash will also tell you how much
money there remains in the account. It

Internet money is as yet not generally used in households that have
Internet. In the Money On-Line study, 13 of the 23 households had modems
and Internet users. Fourteen persons from 11 households spoke of whether
they have bought or would buy on-li

Though the lower cost of on-line payments are at the center of industry
discussion, persons do not give this as a reason for going on-line with
their payments. The reasons mentioned by the users are convenience, speed
and the ability to track the diffe
As Internet money is at the center of on-line payments for electronic
commerce, I present the stories of Bob3 who is an enthusiast and Ryan who
is not. There is little that distinguishes Bob and Ryan in terms of
computer and Internet expertise. Ryan is

The most attractive thing about on-line purchasing for Bob is that it is
generally cheaper; it arrives faster; often it is not available in
Australia and it can be ordered instantaneously. He says, "If I see a
reference to a book, I can put in my email

He thinks that in the future, payment for on-line services will become
"less intentional". He says, "You know it's a bit like the credit card...
It's a bit different from handing over cash... You're removed from the
payment.... It has a different meani

This willingness to pay on-line goes with his use of EFTPOS for cash
withdrawals, and the ATM for depositing checks. He says, "Almost all my
cash withdrawals almost always come from when I do my supermarket shopping
with EFTPOS. So I take $A200 out of
3.1.2 Ryan's story: Concern with Security
Ryan, 36 is in information technology. He and his wife are expecting their
first child and their household income is between $A50,000 and $A60,000.
He is a regular user of Internet for information and communication and has
advertised things for sale on
I'm happy to buy things (on the Net)... but I'm not happy to actually put
credit cards (on the Net). I don't think it's secure at this stage. I have
put my credit card on it, but only to ... a particular bulletin board. It
was secure because it was act

He has often given his credit card on the phone, but he sees that as more
secure than advertising it electronically. However he does not use
telephone or on-line banking and very rarely pays his bills with the
credit card over the telephone. He says,
It's just as easy to go to the bank. I usually have three or four bills
like gas, electricity, rates, whatever. I just go to the bank and pay them
all off. Sometimes I go to the post office.
He also goes to the branch probably once a week for cashing checks or
transferring and depositing money. Other than bills, he prefers to use
EFTPOS where it is available. He uses his credit card when he runs out of
money or when a retailer does not tak

3.2 Forms of Money and Information Reliability
A person's comfort with the use of Internet money, as with other forms of
money depends upon a person's trust in the security and reliability of
the system and his or her control of the particular transaction. However,
as Samarajiva (forthcoming) note

David Bollier reporting on the Aspen Institute Roundtable on Information
Technology, notes:
It may be conceptually useful to distinguish between issues of "hard
trust," which involve authenticity, encryption, and security in
transactions, and issues of "soft trust," which involve human psychology,
brand loyalty, and user-friendliness .... it
This trust can take a long time and may need a variety of "warranting
structures". However some of the factors that help build this trust are
the speed with which orders are filled; being able to accurately account
for the transaction if need be; a wi
This sense of control comes from the presence of at least one of the
following factors:
A physical payments instrument and/or record of payment;
A personalised transaction context;
Ability to track and substantiate a transaction;
Ensure his or her desired level of privacy;
Favourable experience of the form of money;
Knowledge of the service provider and/or the recipient;
The importance of each of these factors has much to do with psychological
factors. This is as true of Internet money as it is for the use of direct
debit via EFTPOS or depositing through the ATMs. An unpleasant experience
with a form of money however o
We tried doing it as an electronic
transaction, you know within the bank a couple of years ago. And a couple
of times it didn't go through and we bounced checks. And I thought I'm not
doing that again. So we haven't bothered to do it again.
Their experience was buttressed by that of their friends. Abraham says,
"Through no fault of their own, they got threatening letters from
people... Yeah, for the cost of a cheque it's just as easy to know you've
done it. "



Part 4 Social and cultural distinctiveness of Electronic Money

The use of electronic money needs to be analysed within the users' social
and cultural context. This is because money, unlike the dominant view
which underlies economic theory and policy, is a social and cultural
phenomenon. Money not only impacts on s
4.1 Electronic Money Changes the Management and Control of Money in
Marriage
Electronic money has changed the way middle income Anglo Celtic married
couples manage and control money. Traditionally control of money was
ensured by restricting access to money and information about money in the
household. This was true for the whol
Electronic money offers greater access to money and information about
money. Direct crediting of wages, pensions and benefits to joint accounts
and access to the ATM, EFTPOS and the credit card makes it possible for
both husband and wife to withdraw mo
The Marriage Money study shows that electronic money has been one of the
factors that has made for a greater framework of jointness in the
management and control of money in marriage. It is mostly wives who
continue to manage the money. However the hou
Husbands' greater control of information about money is likely to be
increased by the greater use of financial management programs (FMP) like
Intuit's Quicken and Microsoft Money. A survey of Quicken usage - which at
present stands at over 100,000 use

4. 2 Financial management programs - Are they making money more male?
The growing alliances and competition between the providers of financial
management programs (FMPs) such as Quicken and Microsoft Money and
financial institutions is a foretaste of the developing competition for
the payments business. It is equally imp

In the Money On-line study, FMPs are used in 6 of the 23 households for
personal finances, with five using Quicken and one using Microsoft Money.
These are medium and high income households. Five of the six households
have modems though only one of th

In the Money On-line study, three households use Quicken as a tool for
marital financial planning and management. Where the wife did not use
Quicken, the control of information shifted to the husband. Where both the
partners jointly inputted and queri
Jean in her 40s, and earning between $A70,000 and $A79,000 a year from her
consultancy business says that before her husband John retired, she would
keep all the accounts for her business, using a program called Best Books.
Now John has taken over all
Goldie in her 50s and earning between $A60 000 and $A70 000 a year as an
academic, is conscious that the way they manage and control money has
changed since her husband Gordon retired. Instead of two wages, they now
have her wage, their investment inc
Isabel and Indra's story is interesting for it shows that FMPs can also be
instrumental for moving from independent control and management to joint
control. Both are in their 20s and are in a cohabiting relationship, but
have decided to get married in

She says, putting her finances on Quicken
was a really big step for me.... It was a big emotional thing. I had to
really get around it.... to actually relinquish that responsibility and
control... I really had to sort of work through it. And eventually I sat
down and put all my figures down on
Julianne Stewart who is studying cotton farmers in Queensland notes a
similar hesitation among the husbands in giving up information on farm
management to their wives. Some women are using an Australian farm
management program called Phoenix. They have
When FMPs are primarily used for business, and are being extended to
record and plan domestic expenditure, the immediate effect is that the FMP
becomes the main separation tool between domestic and business money. At
the same time, because domestic and
At present, Fred and his wife jointly control the money at home, with each
controlling designated areas. He says, "There has never been a situation
... where we've both paid the same bill.... It's just inconceivable... She
controls all the domestic exp
4.3 Cultural Distinctiveness of Money
It needs to be remembered that electronic money is being used in a
particular cultural framework. Recognising the cultural distinctiveness of
money is particularly important as electronic money and commerce
increasingly penetrates non-Western societies

Much of the social impact of electronic money in Australia is mediated
through the marital joint account. Roughly three-fourths of married
couples in Australia have a joint account. The expectation that marriage
will be an equal partnership and women's
Money in marriage that is marriage money is not always the most important
kind of domestic money. Even within Anglo-Celtic society in the United
Kingdom and United States, historical studies suggest that marriage money
became the most important kind o
Money within marriage is also not always joint. Blumberg (1991) cautions
that it is important to recognise that the "separate pot" system of money
management is more common in the world than the "common purse". This is
especially true where polygamy is
A cross cultural approach to money also shows that the assumption that
there is
an opposition between money and personal relationships, between money and
the gift, could be peculiarly Western. In some societies, money in a
particular form, is the only expected gift at a particular occasion. This
is particularly true of the "ang-po

Part 5 Implications for Policy

Successful policies are based on understanding the social and cultural
meanings of electronic money from the users' perspective. The absence of
such an understanding has contributed to banks' inept pricing of payment
services; a delay in transforming t

When payment service providers and regulators place payment services at
the center of analysis, their questions are directed to how best they can
move customers to the lower cost electronic system. At the organisational
level, efforts were directed to

This failure to predict usage cost the banks heavily. In the United
States, it has been estimated that the introduction of ATMs in the 1980s
added $5 billion in operating expenses, while saving only $200 million in
savings from reduced teller positions
Banks also delayed transforming their delivery networks to respond to
customers' changing mix of physical and electronic forms of money. In
Australia, branch remodelling for a long time was driven by banks' need to
reduce operating costs. In the United
In this paper I have argued that providers of payment services need to
address payments activities from the perspective of the users within their
social and cultural context. This would mean concentrating on payments
activities and thinking in terms of
These questions are also important for regulators who seek to monitor and
report developments in the payments system. At present in Australia, the
advisory and industry bodies that look after the payments business
themselves have no data on how custome

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1 I would like to thank Amanda Bow and Karen Wale for their help with the
interviewing and coding of data; and Dallas Isaacs, Mouli Ganguly,
Patricia Gillard and Peter White in helping shape the CIRCIT project
Understanding Demand for Residential Inte
2. The Anglo-Celtic group covers the dominant ethnic group in Australia,
comprising 50.1 per cent of the population. They include those who see
their ancestry as English, Irish, Scottish or other Anglo-Celtic
(Australian Bureau of Statistics, 1988, p.
3 Pseudonymns have been used throughout to refer to the persons
interviewed for the Money On-line and Marriage Money studies. 4 On 2
September 1996, one $A was worth US 78.96 cents. ??