Electronic Value Exchange: Origins of the VISA Electronic Payment System (review)

This is a global history of the VISA card organization and services from its establishment in the 1960s to the early 1980s. The book provides a socio-technical account of VISA, a banking service to which banks that issued cards belonged and that sold card-processing services to merchants. David Stearns provides a history of the institution that developed the card, the role of its management and technical staff, and the evolution of its payment systems and other technologies. It details the culture of credit and debit functions in banking and how they interacted with cards, with the terms and conditions of their use, and with the role of information technologies (IT). The author argues that it was more than a card; it was, rather, a gateway into various banking behaviors and services. Stearns has absolute command of both the technological underpinnings of payment systems and of the role of credit and debit cards.

This book is an addition to a growing body of recent publications about the uses of technologies by an industry or application. Other scholars have recently examined the use of computers in banking, insurance, manufacturing, and government industries, informing historians as much about how these industries worked as about the role of information technologies over the past six decades. Other detailed studies of uses—applications—have been done for weather reporting, American Airlines’ SABRE travel reservation system, supply chains, and tax systems. Now we have it for bank payment systems, with VISA as the detailed case study.

The book proceeds in chronological order. After describing early-twentieth-century charge cards, Stearns recounts the origins and evolution of the organizations set up to offer this service, in particular discussing the emergence of what came to be known as VISA. VISA’s creator, Dee Hock, is a driving force in the story, for he was the one with the vision and managerial capabilities to create and run the organization in its early years. The title Electronic Value Exchange is a reference to Hock’s vision; he believed the card’s ultimate purpose was to facilitate the exchange of economic values among customers, merchants, and banks. The author describes the computer applications that were written and launched, and how they were shaped by the interests of member banks, by the needs and interests of merchants, and by prior practices in the use of credit and payment systems. This book is as much a cultural/sociological history as it is a history of computer uses and technologies. This is particularly the case in the descriptions of the core IT tools used: BASE, BASE II, BASE III, and BASE IV.

Stearns effectively uses the VISA story to demonstrate how social/cultural perspectives can shape technological innovations and uses, providing evidence that culture trumps engineering, yet technology also shaped culture. For example, Hock makes the point that with VISA’s services came the reshaping of what it meant to be a bank, as banks merged various types of services and accounts together when historically these had been kept apart. He demonstrates how prior practices in the use of computing continued to affect both the nature of new technological adoptions and uses, such as occurred in changing relations with IBM and the development of point-of-sale terminals.

This is an important book, because, like the work of JoAnne Yates, for example, Stearns illustrates how information technologies and corporate cultures interact, an issue of interest to historians of computing and information as well as to historians of technology and business more generally. It is a readable volume, based on an extensive set of interviews of protagonists of the story and on secondary theoretical and banking literature. It is effective in demonstrating how deep knowledge of the development and use of technology can be merged into effective discussions of corporate cultures and practices. It is a welcome addition to the history of banking and of information technologies, and a useful example of...