Electronic money: understanding its use to increase the effectiveness of policy

Policy on electronic money and electronic commerce would be more effective if there was a better understanding of the use of electronic money. The users’ perspective would complement the supply-side, economic and technological understanding of money with an understanding that emphasises the use of money in its social and cultural context. Mistaking the partial story for the whole can lead to costly misjudgements for providers and regulators. It also leads to an incomplete understanding of communication, innovation and social change.This article presents a methodology for exploring the users’ perspective, drawing on case studies on the actual use of electronic money. The user and his/her activities are placed at the centre. This leads to three shifts: the questions change, language and key concepts alter and the adoption and use of innovations is seen as a social activity. The users’ perspective presents three challenges for providers and policymakers. The first is to collect qualitative and quantitative data not only on the diffusion of innovations, but how innovations are used and not used in particular social and cultural contexts by different users. The second challenge is to find a language that will connect the economic analysis of supply and demand, cost and price with the study of use, trust and meaning. The third challenge is to acknowledge the interrelationship between the economic and non-economic aspects of our lives.