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Plastic MoneyConstructing Markets for Credit Cards in Eight Postcommunist Countries$
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Alya Guseva and Akos Rona-Tas

Print publication date: 2014

Print ISBN-13: 9780804768573

Published to Stanford Scholarship Online: September 2014

DOI: 10.11126/stanford/9780804768573.001.0001

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Russia, Ukraine and Bulgaria

Russia, Ukraine and Bulgaria

(p.151) SixRussia, Ukraine and Bulgaria
Plastic Money

Akos Rona-Tas

Alya Guseva

Stanford University Press

The chapter focuses on how card markets were constructed in Russia, Ukraine and Bulgaria. The unique features of these markets are: a substantially large “gray” (cash) economy, which gave merchants a strong preference for cash over cards; complicated income verification of credit applicants; and dialogue about creating national payment systems based on domestic cards. The spread of coercive cards via salary projects is now accompanied by pressures to legally mandate card acceptance by merchants. Card issuers appear to be powerless in the face of several puzzles--they are either defeated by the resistance of salary cardholders to use cards for payment and by the refusal of merchants to accept cards, or they are paralyzed by the inability of the banking community to control competitive tendencies in favor of greater cooperation over standards and information. This emphasizes the key role of the state in constructing markets.

Keywords:   Bulgaria, Ukraine, Russia, domestic cards, national payment system, salary projects, “gray” economy, role of the state, legislation of credit reporting, mandating card acceptance

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