Visa, Rwanda, and Trust
I bought lunch for a colleague yesterday, and left the restaurant without paying. Or at least, to an untrained eye, it would seem that I had done so. Rather, I had of course paid by means of a credit card. The restaurant, in other words, trusted the credit card company, which in turn trusted me, to pay up. None of this required that I have any cash at all in my pocket, nor even that I have money in my bank account. All that it required was trust rooted in knowledge of financial capacity. The financial capacity part, of course, was up to me. But all the capacity in the world would not have been enough without the relevant institutional mechanisms to verify it.
Such trust-based transactions happen billions of times each day. They are so much a part of everyday life that we take entirely for granted just how remarkable, and just how essential, they really are. This is probably the most important function of financial institutions. They make possible the wide range of commercial transactions that permit our modern standard of living. And that is what makes this next story worth reading.
Bloomberg reports that Visa, Inc. has “agreed to help develop Rwanda’s payments system and connect the African nation’s 11 million citizens to the global economy….”
And Rwanda is a country deeply in need of increased commerce, both domestic and international. In, 2010 the country ranked 165th in the world in terms of per capita GDP. (Not coincidentally, Rwanda also ranks among the worst countries in the world for infant mortality.) Giving its consumers and businesses a greater range of ways in which to receive and make payments is a step in the right direction.
The financial industry has received more bad press than good lately. But on the face of it, at least, this particular story seems like good news.
It’s no exaggeration to say that trust is the foundation of all commerce. Any company that gives people a mechanism that promotes trust, and hence facilitates commerce, is doing a genuine public service. But what are the chances that devotees of Corporate Social Responsibility will see this move by Visa as an example of that?
The Business Ethics Blog 
Is commerce truly built on trust or is it just something that comes along with commerce? I feel that after recent events in America that trust is the least of the virtues in people’s heads when they think of credit agencies and big businesses. Trust was exploited as a virtue and customers of banks and businesses and these trustworthy businesses let their foundation of trust get the best of them. They lent out too much money that people could not afford to pay back and businesses had to start cutting corners because it was hard for them to get credit because of all of this; which shows us that this has run its full circle and is now back on to us to begin trusting again.
Robert:
Thanks for your comment. I do think commerce is absolutely built on trust — in the functional sense. Part of the challenge here is that we often imbue the word “trust” with an emotional component. But at a basic functional level, trust just means reasonable certainty about how the other person will behave. So absolutely all commerce requires that each side trust the other — even to trade you an apple for a fish, I’ve got to trust that you’re not going to whack me on the head and run away with both. That doesn’t mean I have to admire or like you, but I do have to trust you “enough.”
Chris.