Retail Payment Systems

In the OIC Member Countries

distinctive needs (Rogers, 2003). More recent research on the role of social networks in

regard to payment systems confirms this pattern.

In addition to competitive isomorphism, institutional isomorphism might occur in the context

of retail payment ecosystems. Institutional isomorphism involves organisational competition

for legitimacy that can occur through three mechanisms: normative, mimetic, and coercive

isomorphism (DiMaggio and Powell, 1983).

Normative isomorphism is driven by pressures brought about by professions. One mode is the

legitimisation inherent in the licensing and crediting of educational achievement or in the

inter-organisational networks that span organisations. Inter-hiring between existing

companies also encourages isomorphism. People from the same backgrounds will approach

problems in much the same way and socialisation of this job reinforces these conformities.

Mimetic isomorphism is a response to uncertainty, turbulent environment, or when the

innovation is not well understood. Although mimesis might not result in the best outcomes and

companies may find themselves following choices that have nothing to do with efficiency or

effectiveness, they mimic the others in the network in order to respond to the pressure of

confirmation and to ensure the organisation’s legitimacy (DiMaggio & Powell, 1983).

Coercive isomorphism results from formal or informal pressures on organisations enforced by

other organisations upon which they are dependent (DiMaggio & Powell, 1983). In many cases,

it refers to homogeneity pressure from political influence, and may be felt as force, persuasion,

or invitations to join in collusion (DiMaggio & Powell, 1983).

All of these forces are found, to differing degrees and in different countries, and help to explain

the stop-and-go processes that typify the move to different kinds of retail payment systems. In

some cases firms individually respond to the forces that bring about common forms of

behaviour, in some cases it is governments that influence or impose standards or

commonalities.

3.6 Supply-Side vs. Demand-Side

Rogers (2003) shows that innovations typically spread through society in an S-curve as the

early adopters select the technology first, followed by the majority, until a technology or

innovation is common. This pattern is found throughout the world but depends on differential

controls that might be applied to markets for technologies. Such controls are found in some,

See

and

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