Paying with Plastic: The Digital Revolution in Buying and Borrowing

by David S. Evans, Richard Schmalensee

The definitive account of the trillion-dollar payment card industry. The payment card business has evolved from its inception in the 1950s as a way to handle payment for expense-account lunches (the Diners Club card) into today's complex, sprawling industry that drives trillions of dollars in transaction volume each year. Paying with Plastic is the definitive source on an industry that has revolutionized the way we borrow and spend. More than a history book, Paying with Plastic delivers an entertaining discussion of the impact of an industry that epitomizes the notion of two-sided those in which two or more customer groups receive value only if all sides are actively engaged. New to this second edition, the two-sided market discussion provides useful insight into the implications of these market dynamics for cardholder rewards, merchant interchange fees, and card acceptance. The authors, both of whom have researched the industry for more than 25 years, also examine the implications of the recent antitrust cases on the industry as well as other business and technological changes—including the massive consolidation brought about by bank mergers, the rise of the debit card, and the emergence of e-commerce—that could alter the payment card industry dramatically in the years to come.

Genres: Business, Nonfiction, Finance

385 pages, Paperback

Published December 17, 2004

About the author

Evans is an economist whose work on platform businesses, the digital economy, financial services, and antitrust economics is widely cited. He is the author of nine books and more than 150 articles on those and other economic topics. His most recent book, Matchmakers: The New Economics of Multisided Businesses, won the 2017 Axiom best economics book award, and was featured in the New York Times, Wall Street Journal, and Economist. Evans is frequently asked to speak to global audiences on the digital transformation, platforms business, and antitrust.

Evans uses his research to advise companies, from early-stage firms to the largest global digital businesses and has consulted for many of the prominent digital platform companies based in the US and China. Evans has also applied his expertise for testimony before courts, legislatures, and regulators in the US and abroad. The U.S. Supreme Court cited his work on platform economics and payment cards extensively in its American Express decision.

Evans has had a long career in academia. Between 2004 and 2022 he was a visiting professor at University College London (UCL) where he taught intensive courses on the digital economy and multisided platforms, and their application to competition policies, which were streamed to antitrust authorities globally. He was a Lecturer at the University of Chicago Law School between 2006 and 2016 where he taught an advanced seminar on antitrust economics. Previously he was a professor at the Fordham University Department of Economics and at Fordham Law School.

Reviews

[Grahamshircore · Rating 2 out of 5]

A fascinating subject but the is hard to follow at points and could be so much better. There are some great bits in there with discussions about b usiness strategy etc but it is also let down by the fact it was published in the midst of some of the most revolutionary developments in the industry-perhaps the authors could've waited a year or two.

[Amanda Skaar · Rating 3 out of 5]

Reads like a history book and that’s what makes it so mind boggling - the narrative ends in 2003 and it’s crazy to think how much has changed in payments since then. Only a few mentions of PayPal and mobile money in Europe. One for those who want to geek out like the Collison brothers

[Zheng · Rating 5 out of 5]

It is a very informative and good book, a lot of good data, but also, not an easy one to understand if you don't have experience in this space - which Payment somehow designed to be confusing.

[Sam Villaluz · Rating 3 out of 5]

Informative but a reminder that books like these age fast. Too many references to 2001.

[Darrell · Rating 4 out of 5]

I found this to be a very good history of the evolution of payment cards. Very useful to me in my involvement in the payments business.

For the student of evolutionary economics, it really helps you understand why some companies and networks have succeeded, and how the environment at the time influenced creations and opportunity.

I also came away with a deep understanding of how pervasive credit has been in American society for two hundred years.

Doesn't really help us see where the payments world is going, though.

[Mike Landau · Rating 4 out of 5]

helpful history, with an economics lean. would love for David Evans to update his book for the last decade of payments... although on its own this edition still proves to be valuable for anyone looking to brush up on payments.

[Tina Johnson]

Evans traced the origins of credit card and shared with us how the plastic works.

[John · Rating 2 out of 5]

Not what I needed, but that's not the authors' fault.

[John Huffman · Rating 3 out of 5]

Very thorough overview of the payment industry although getting a bit dated.