Why pay? An introduction to payments economics

Charles M. Kahn, William Roberds

Research output: Contribution to journalArticlepeer-review


This paper surveys the growing literature on payments. We begin by presenting a simple model that illustrates the essential function of payments and how this may be implemented through various arrangements. We show how the basic models of payments have been used to address a variety of microeconomic and macroeconomic policy issues. We then discuss the links between payments economics and other fields, including monetary theory, corporate finance, and industrial organization. We conclude with an overview of the empirical literature and directions for future research.

Original languageEnglish (US)
Pages (from-to)1-23
Number of pages23
JournalJournal of Financial Intermediation
Issue number1
StatePublished - Jan 2009


  • Money
  • Payments

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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