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FOREWORD
Retail payment systems have been applied to one of the oldest problems of civilisations: how
payment can be made for goods. In this report we address these systems primarily from the
perspective of those relatively new technologies, businesses and processes that challenge cash-
based systems. Our purpose is to explain these new technologies and their significance for OIC
Member States and to offer recommendations on how to learn from best practices that can
enhance the economies of these countries.
From the earliest barter systems to the instigation of symbolic value in the form of chits and
accounts, to the full-fledged development of monetary systems, the problem of how to store,
transport, standardise, distribute, secure and account for value has generated a myriad of
solutions. For most of the twentieth century the world standardised such practices around
physical national currencies, i.e. notes and coins authorised by national treasuries and central
banks. These stores of value were underwritten first by gold and later by sovereign
guarantees and as a consequence earned the confidence of the public to the extent to which
such guarantees were credible. The transformations of the late twentieth century from cash to
cashless payment systems, most notably credit, debit and prepaid cards in the advanced
industrial economies, marked a subtle, but profound and soon widespread shift in thinking and
behaviour. From that time the further abstraction of payment moved far beyond barter, debt
and coin of tangible value, beyond promissory notes and symbols of national guarantees, to an
ethereal concept of value, or debt, held in distant institutions and transported over public and
private telecommunications infrastructures to rectify accounts held by many participant
players geographically dispersed.
Once such an abstract concept of payment could be accepted—and in some societies it is more
or less accepted—a vast variety of means and mechanisms might be adopted. This variety
could be associated with different institutions and intermediaries, different forms of
accounting, as well as diverse types of immediate value, stored value, debt and future value.
New payment systems are applied by a wide range of organisations and not just states that
underwrite notes and coins and sanction banks and credit card companies. It could also be
undertaken by many other actors interested in becoming involved in payment systems such as
large retailers, using their own credit cards, pre-paid cards for stored value, loyalty cards and
schemes that reward and store symbolic value that can be used according to their own rules. It
can be a system operated by a transportation network, such as Hong Kong’s ‘Octopus’ card and
Tokyo’s ‘Suica’ card. It can be part-owned and run by companies such as Sony or Apple, or