The Ascent of Plastic Money: International Adoption of the Bank Credit Card, 1950–1975

This article studies the genesis and early international expansion of the bank-issued credit card—an American innovation that quickly took hold in western Europe. Empirical evidence undermines the proposition of a single firm building a proprietary network. In fact, it was a constellation of partici...

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Bibliographic Details
Published inBusiness history review Vol. 92; no. 3; pp. 509 - 533
Main Authors Batiz-Lazo, Bernardo, Del Angel, Gustavo A.
Format Journal Article
LanguageEnglish
Published New York, USA Cambridge University Press 01.10.2018
Subjects
Annual reports
Antitrust
Competition
Corporate histories
Credit
Credit card industry
Credit cards
Customers
Economic history
Externality
Financial institutions
Financial services
Infrastructure
Innovations
Intercountry adoption
Markets
Merchants
Money
Retail stores
Reunions
Success
United States > US
Mexico
Spain
Bank of America
Banco de Bilbao
Banamex
Spanish banks
credit cards
cashless
two-sided markets
Barclays
Mexican banks
Bancomer
British banks
retail payments
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Summary:This article studies the genesis and early international expansion of the bank-issued credit card—an American innovation that quickly took hold in western Europe. Empirical evidence undermines the proposition of a single firm building a proprietary network. In fact, it was a constellation of participants that combined three characteristics, namely, a critical mass of both retail customers and retail merchants; the capacity to implement new technological solutions; and the ability to forge resilient collaborations across national borders. The evidence supports the value of collaboration in retail financial services as means of appropriating network externalities. Moreover, other conceptual and empirical studies, especially those based on two-sided markets, neglect the greater implications that initial conditions in this industry have on long-term success.
ISSN:0007-6805
2044-768X
DOI:10.1017/S0007680518000752