The Lydian Payments Journal publishes articles from thought leaders on one of the most important industries in the world-an industry that makes trade, the source of almost all economic prosperity, possible. That will seem like an outrageous claim to some people. Making and receiving payments is so routine and trivial that most take it for granted. But flash back three millennia to the days when a lot of effort went into buying a chicken. Our ancestors had to figure out what they could offer the chicken owner in trade. Maybe a shirt or a clay pot, or as trading became more sophisticated a slug of some precious metal.
The Kingdom of Lydia, a region that is now part of eastern Turkey, started the payments industry at least in their part of the world in around 600 BC. The government stamped out a coin with a particular metal content and therefore value. It became a popular method of payment and soon created imitators. More innovations followed. All these innovations greased the way for trade.
In doing so the payments industry permitted the creation of vast wealth for society. Besides simply making it easier for people to exchange value it encouraged economic specialization and trade over ever expanding regions. The latest frontiers are e-commerce and mobile phones. Trading in some of the poorest parts of the world is now undergoing a revolution as a result of payments innovations made possible by wireless communications.
Today, a vast industry supports payments. It includes governments that make cash; networks that clear and settle transactions; banks that provide their customers with several payments devices; companies that issue credit cards; entities that help merchants take and collect payments in a variety of ways; manufacturers of point-of-sale terminals, ATM machines, and other hardware; software providers who sell applications that make many things work; and many more.
Until recently, the payments industry attracted relatively little serious thought, analysis, and discussion compared to its outsize economic importance. That has changed in the last decade. The new economics of two-sided markets has provided both an analytical framework for understanding the payment business and an incentive for applying their new tools to one of the most interesting two-sided businesses around. At the same time controversies over payment card interchange fees have resulted in a lot of attention paid to how payments are done.
An outpouring of work on strategy, economics, law and policy has come from the minds and pens of business, economic, legal and policy experts from around the world. If you are a payments professional, or a policymaker concerned with this critical industry, the Lydian Payments Journal is the place to come for cutting edge knowledge and commentary produced by the best thinkers from around the globe. If you are one of these thinkers the Lydian Payments Journal is a common place for you to present your research and exchange ideas with other experts from diverse disciplines and geographies who are also interested in payments as well as to make you and your work known to the broader payments community.
We hope you enjoy the first of many issues to come.
David S. Evans is the author of Paying with Plastic: The Digital Revolution in Buying and Borrowing. Evans is the founder of Market Platform Dynamics, a boutique consulting firm that helps businesses leverage economics and quantitative methods for growth and profit. Evans teaches part time at the University of Chicago where he is a Lecturer and at the University College London where he is a Visiting Professor and Executive Director of the Jevons Institute for Competition Law and Economics.