The Pay Off: How Changing The Way We Pay Changes Everything

Central bankers have long been accustomed to criticism. Interest rates are too low or too high; inflation assumptions miscalculated and targets misplaced. Their masters are too independent, or not independent enough; too demanding of banks, or insufficiently exacting of them. All this and more is debated in national conversations across the world – in broadsheet newspapers, on television and radio; now even on Twitter, Facebook and LinkedIn.

But the work that central bankers do in payments is different. Although not hidden from public view, it is closely followed only by those working in payments, and largely ignored by the mainstream media. For sure, central banks’ websites, podcasts and Twitter feeds are littered with news of their activities; symposia, conferences and meetings are open to the general public – even more so now, thanks to Zoom – and invitations to public consultations are rife. But for all the multiplicity of channels through which central banks can (and do) communicate about their work, it’s not just a case of build it and they will come. Audiences need to be attracted and followings built. And in the case of payments, the evidence would suggest that Joe public has yet to buy into their importance.

For the past few decades that hasn’t posed too much of a problem. Hard work behind the scenes has supported a gradual evolution in payments. Resilience has been enhanced and risks reduced; new functionalities have been added, speed improved and access has widened. On the back of this consumer and merchants’ payment choices have amplified and payment volumes – in particular, non-cash payments – have multiplied.

Now, however, we are on the brink of a revolution in payments. And that shift from evolution to revolution does require public involvement. Not only does consumer awareness have to rise, but big choices have to be made – whether to issue a CBDC and in what form; whether to preserve cash and how; whether to support stablecoins and on what basis.

Central bankers are all too aware of the magnitude of these decisions. Scarcely a day goes by without another test or trial, project or paper, consultation or conference being announced, or taking place. But public awareness remains lamentably low, even while the speed of change is accelerating. Big Tech is poised to make big moves and investors are moving a huge amount of money into cryptocurrencies – many doubtless ill-informed about the risks. Central bankers rightly want to take cautious, prudent, informed steps into the future, but the future is happening fast.

Many of those working in payments have long been perplexed by the lack of public interest in payments. How can such a rich and important part of our daily lives, our societies and economies remain unexplored and for so long? How can it still be side-lined when so much has changed, is changing and will change? For sure, there is ample literature on payments – not only publications like this, but scores more besides. There is the literature pumped out by central banks and academia; by think tanks and banks – and then there are serious books about money, what it means and how it moves, many of them excellent, but few for the layman.

When we set out to write The Pay Off, How Changing the Way We Pay Changes Everything, we aimed to write a textbook – in part because much of the money storming the payments industry seemed ill informed about how money actually ‘moves.’ But before long we realised that writing for those already interested in payments was to miss the point; rather than preaching to the converted, we needed to convert indifference to interest.

The challenge before us was mindbogglingly large, it would be harder to write for the general reader than the specialist, but ultimately it would be more rewarding. Written against a fast-ticking clock, we had our work cut out just to keep up. And along the way, we realised that publishing timelines are long and pricing opaque; that distribution is concentrated in just a few channels, while sale endpoints remain dispersed. In sum, we learnt that cross-border payments have nothing to be ashamed about when compared with cross-border book sales, and that publishing (largely) remains a national fiefdom, complete with all its frictions.

The Pay Off has little to tell central bankers – after all they are masters of the craft. But if the book lays bare the gap in awareness between experts and everyman, between technologists and economists, and between the profit-seeking private sector and payments’ public sector guardians; if it helps in some small way to raise public awareness about payments and unmask the magnitude of their importance; if it stimulates public debate, arouses curiosity and helps inform payment choices, then it will have done its job.