New York City Financial Experiment, Essay Example

“In late 1997, two New York City banks tried an experiment on the Upper West Side of Manhattan. They spent millions installing special digital-cash-card machines in all kinds of retail sites–hairdressers, retail stores, even taxicabs” (Ramo, 2000, par. 4).  Although the concept of digital money coincides with the advancement of technology into everyday life, this experiment by the New York City banks failed miserably.  The main reason why this experiment failed was because there was a lack of availability for the digital cards to be used all across New York City.  The banks attempted to include as many different stores and companies as possible, but it was still not enough.  The financial consumers were forced to use real money along with the digital cards.  Some consumers complained that there was not enough money on the cards to purchase everything that needed to be used.  Banks realized that they needed to include more than the original 30% of financial resources for the customer to use freely.

In the end, the error in the experiment came from the banks.  These two New York City banks attempted an experiment by assuming consumer activity and purchasing behaviors.  The banks attempted an experiment that did not have enough widespread support by companies all across the city.  Having two different methods for spending money was ultimately too difficult for the consumers and the experiment failed.  Also, there were only a limited number of free digital cards that were distributed around the area.  Not everyone was using these digital cards and these forced consumers to feel extracted from the rest of the population.  These issues only proved to banks that in order to produce a successful version of the experiment, it would need to be on an even greater emphasis that would involve everyday activities.  The goal is ultimately to replace how we spend money with an easier, digital format that would reduce paper and coin money altogether and use any digital financial resources for consumers to utilize in their everyday purchasing activities.

References

Quittner, J. (1997). Mondex, visa star in nyc smart card premiere.(new york, ny test marketing of smart cards). HighBeam Research, Retrieved from http://www.highbeam.com/doc/1G1-19827404.html

Ramo, J.C. (2000, May 22). Will Cash completely vanish?. Time, Retrieved from http://www.time.com/time/magazine/article/0,9171,997025-1,00.html

Van Hove, L. (2000). The New york city smart card trial in perspective: a research note. International Journal of Electronic Commerce, 5(2), 119-131.