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 in:Business history review 2018-10, Vol.92 (3), p.509-533
Main Authors: Batiz-Lazo, Bernardo, Del Angel, Gustavo A.
Format: Article
Language:English
Subjects:
Annual reports
Antitrust
Business models
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
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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