The Virtuous Circle
Vast volume makes disputes intolerable; and lack of disputes enhances volume
Circle has long been at work in paper-world
Technology enhances and accelerates the cycle
Net Result: no material Internet jurisdictional issues
In short, the operational imperatives of payment systems are such that they do not generate disputes that require adjudication. As to any differences that might arise, solutions are provided for in advance by detailed agreements. The daily volume of global currency transactions is on average in excess of 1.0 quadrillion of US dollars. The average daily volume on the Fed Wire, a principal component of the US payments system (discussed below), has exceeded 1.0 quadrillion US Dollars since 1997. Such a system could not tolerate the clogging that would result from the accumulated burden of cases if only a very small percentage of the daily transactions became disputes. Indeed, a virtuous cycle is at work: because there is vast volume, disputes are intolerable; and because disputes have not been tolerated, expansion of the volume has been enabled. This cycle has long been at work in the paper-world. The addition of super-computers has simply enhanced the cycle and accelerated its operation.
Thus, the traditional payment system has evolved in a manner that the very stuff of jurisdictional conflicts is avoided. This is an important fact on two levels: first, this strategy of avoidance is employed with respect to business-to-business electronic transactions generally. Secondly, it foreshadows a central point that I will make latter -- namely, that a particular avoidance strategy may be the most effective strategy for dealing with jurisdictional conflicts regarding business-to-consumer transactions as well.
So long as the commerce generated by and through the Internet interfaces with the established payment systems, issues of the type that the ABA’s Jurisdiction Project is to address are not presented. This is not to say that the system does not face major issues; computing capacity, bandwidth of transmission facilities, inconsistent file types, security, customer acceptance – to name only a few. The sheer magnitude of the operations of the international payments system virtually guarantees that there will be issues of many types. But they do not meet the criteria of the foundation principles.