Payment

Consumer

Three ways of payment are possible: backward (credit) cash and prepaid. The easyest way to understand the practical difference is looking from the bankers' perspective. Backwards is the most riskfull way so the interest rates will be highest, in fact the interest rate is containing the extra riskpremiums for not paying or even bankruptcy. Paying cash looks most simple but still there is a great risk for the retailer if continuation of business will be possible in the future.

Most secure ways of doing business are the prepaid versions like subscription, prepaid chipcards, consumer-financed stocks. In fact we give then the right signal that we're asking an economic question. And by arranging for instance a three month or six months' notice we have the freedom to change to another producers or retailer. But that gives all parties to think and talk about problems and to arrange changes if neccesary.

Already many payments are prepaid: housing, papers, communication etc etc. In many other areas there are experiments for instance in the chain of food and agriculture, But bankers can tell you that all these constructions make the possibility of bankruptcy to a minimum risk. And in the end consumers will have to pay less for their products.