Sociology professor Akos Rona-Tas (University of California, San Diego) visited the University of Illinois to give a lecture titled “Farewell to Globalization: Varieties of National Control over Payment Card Markets in Post-Communist Countries and the Rest of Europe.” It was a continuation of his co-authored book, Plastic Money: Constructing Markets for Credit Cards in Eight Postcommunist Countries (2014). This lecture was very poignant at a time when the Equifax breach aftermath still shapes peoples’ everyday lives. Rona-Tas introduced the global payment card market, the different iterations of domestic markets globally, and the many factors that lead to the success and failure of various payment cards across the world.
Rona-Tas began by introducing one of the principal legacies of globalization. The expansion of financial markets and the use of digital money and cards transformed markets across the world. Huge companies, largely American, experienced enormous growth and control of the international market in the promotion of payment cards, most notably MasterCard and Visa. The anti-global movement that has recently been actualized in secessionist movements, and the rise of populist governments in Europe and in the United States can be seen as an attempt to stop or control the effects of globalization. This crisis of globalization has allowed new and developing markets to expand and use the methods of global markets to build consumer payment cards within the domestic sphere, adding their own political agendas.
Domestic and national cards allow specific communities and groups to contest global hegemony by creating their own network and economy of payment cards. This redistribution of power and influence has placed a strain on the conventional power relations within the monopolizing companies of payment cards (i.e. Visa and MasterCard). These companies specifically have pointed out the threat of national markets as having the potential to completely restructure the global market of payment cards. In his lecture, Rona-Tas discussed the domestic payment card markets of several countries and their relationships with these global companies.
Rona-Tas first introduced the Denmark case: the Dankort payment card. The Dankort was first imagined in the 1970s, and the Dankort card was introduced to the market in the mid-1980s. Due to the Dankort’s early arrival to the the Danish market, the Dankort has experienced many unique protections and exhibits behaviors that are not present in other small economies. In the mid-1980s, Visa and MasterCard did not have the global influence to be able to push the Dankort out of the market as effectively as they could later. Also, the Dankort became protected by legal frameworks, and due to its government support, became known as a cheaper option than international cards. The Dankort remains Denmark’s most prominent payment card on the market, although Dankort has created an alliance with Visa and MasterCard to make international travel with the card easier. Even with this acceptance, the Dankort remains highly protected and centralized to the economy of Denmark, therefore protecting it from international control.
Similar to Denmark, China was another example of a domestic market which became highly successful. The Chinese card Union Pay entered late in the international payment card front in 2012. Union Pay has risen to be the largest payment card in the world; it is available in 42 states and accessible for use in more than 100 countries. Rona Tas stressed that one of the biggest reasons for Union Pay’s production and subsequent expansion was to create financial sovereignty in China from the large international companies. In addition, China saw Union Pay as its own form of surveillance and monitoring of the financial choices card holders made. The Chinese government developed technology to use the data of the transactions in the form of a “social credit database.” This database collects all the public records and spending trends to combat tax fraud and also upholds social expectations of Chinese citizens, such as visiting old parents. These scores have been used for purposes such as getting jobs to finding dates on dating websites in China. Rona-Tas likened this system to the Television show “Black Mirror,” in the way that the financial records and technology footprint that users leave can be used to control and monitor them on the basis of ethical policing and compliance to the state.
Russia has also created a card system, however under different circumstances than previously introduced. MasterCard and Visa were very developed in Russia until the Crimean- related sanctions. These sanctions froze the Visa/MasterCard accounts of over 2 million people in the region. In the backlash, Russia created its own card called Mir. Mir has also built alliances with Union Pay as a means to allow Mir users to use their cards abroad. Today, there are 19 million Mir cards, and the number will probably grow as the Russian government develops the uses of Mir. For example, the Mir cards will be used to dispense welfare.
In his conclusions, Rona-Tas cited autocratic regimes as the one of the most successful at “muscling their way in” with a national card scheme. The success of card markets depends on where the states are in their own historical development, when they introduce them, and the political goals of the states can and will shape markets to adhere to the desired socio-political arrangements. Globalization is not a one-way street, and nations do try to reverse global dominance with the introduction of national card schemes.
Madeline Artibee is an MA student in REEES. She studies the former Yugoslavia, specifically Croatia and Serbia. Her research interests include consumerism, pop culture, and Yugo-nostalgia.