Electronic Commerce and the Banking Industry: The Requirement and Opportunities for New Payment Systems Using the Internet

With the rapid expansion of the Internet, there are a number of initiatives underway for the creation of a secure cost-effective payment system which will be able to support growing commercial activities on the network. Although electronic payment systems for large payments have been in operation for some time, rapidly expanding volumes of foreign exchange and securities trading are increasingly at variance with the requirements for a cost-effective and efficient electronic payment system for making low value payments. Current progress in establishing such payment systems on the Internet is examined. The paper argues that the ultimate vision could be for a truly global and virtual marketplace requiring completely new institutional and legal structures and having a similarly profound impact on economic life to the medieval trade fairs which emerged in Europe in the 12th century.