Paying with Plastic
The Digital Revolution in Buying and Borrowing
In Paying with Plastic, David Evans and Richard Schmalensee provide a nontechnical distillation of their years of research on the economic, technological, and institutional forces that have shaped the payment card industry.
Since Diners Club issued its first charge cards in 1950, payment cards—credit, debit, and charge cards—have revolutionized how and whenwe pay for goods and services. In Paying with Plastic, David Evans and Richard Schmalensee provide a nontechnical distillation of their years of research on the economic, technological, and institutional forces that have shaped the payment card industry. They show how competition works in an industry that does not neatly fit any of the standard economic models. They describe how the payment card companies such as MasterCard and Visa have developed complex systems for coordinating transactions among their thousands of bank members and millions of cardholders and accepting merchants. Evans and Schmalensee also describe recent developments in the industry and consider its likely evolution.
HardcoverOut of Print ISBN: 9780262050623 387 pp. | 5.9 in x 8.9 in
PaperbackOut of Print ISBN: 9780262550376 387 pp. | 5.9 in x 8.9 in
This very readable book will appeal not only to policy makers and business executives, but also to the theoretically inclined economist. Evans and Schmalensee provide a rigorous analysis and deep insights about the credit card industry's fascinating institutional features. Paying with Plastic considerably advances the state of our knowledge and is a remarkable achievement.
Institut d'Economie Indutrielle
Evans and Schmalensee have provided a clear discussion of the structure and processes of credit card systems and how they fit into the larger world of transactions and money. The book will be a useful reference for understanding the network structure of credit cards and how the two major credit card associations—Visa and Mastercard—operate.
Lawrence J. White
Professor of Economics, Stern School of Business, New York University
Paying with Plastic is a practical discussion about a complex industry that drives almost $3 trillion in worldwide purchases every year. Evans and Schmalensee illuminate the inner workings of an industry that many know by virtue of the cards we carry in our wallets, but few really understand. It is required reading for anyone who works in, works with, or studies payment cards.
Foundation Professor of Law, George Mason University, and former Chairman, Federal Trade Commission
Paying with Plastic examines a quiet revolution in the U.S. economy—the steady transition from checks and cash to credit, debit, and charge cards. The authors describe the causes and consequences of this transition in terms of economics and law—all in plain English that the non=specialist can understand. This book has become an immensely valuable source on an important subject.
Joseph and Madeline Sheehy Professor in Antitrust and Trade Regulation Law, and Dean emeritus, Georgetown Law School, and former Chairman, Federal Trade Commission
Authors Evans and Schmalensee have written the definitive book on the business of bank cards. The reader will come away an expert, with a clear understanding of the business drivers, the players, and the complex issues behind the business of bank cards. This should be required reading for anyone engaged in the bank card industry, from executives at the associations to systems integrators and vendors that service this market.
John C. Gould
Director of Consumer Lending and Bank Cards Practice, TowerGroup
Evans and Schmalensee offer a comprehensive, highly readable account of the evolution of the payment card industry, from the birth of the Diner's Club card a half-century ago in Manhattan to the contemporary legal battles between American Express and the bank card associations. Along the way, they analyze the economic impact of the industry in areas ranging from the diffusion of consumer credit to the evolution of multi-sided market platforms.
Executive Director, AEI-Brookings Joint Center