Effects of Two New Inter-Organizational Systems to Settle Cross Border Euro Payments between Financial Institutions in Europe

Previous research indicated that the performance of interorganizational processes in electronic markets and hierarchies is influenced by eight factors: stakeholders, competition, information technology, market network (re)design, risk, process (re)design, information, and trust. This paper focuses on the inter-organizational processes related to the settlement (clearing) of cross border Euro payments. As of January 1999 the European Central Bank has intermediated the existing network of banking organizations by offering two new alternatives (TARGET and EBA). Two conclusions can be drawn from this case study. First, the process performance criteria critical mass, accurate price discovery and transparency which are important in Transaction Oriented Electronic Networks are less important in Processing Oriented Electronic Networks. Second, differences in stakeholder motives have led to problems for certain stakeholder groups, both in the development phase as well as after implementation of the