There’s a scene in the Iliad where Glaucus and Diomedes exchange their armor. Homer, the epic poem’s author, remarks that Glaucus must have been robbed of his wits: Whereas Glaucus’s golden armor was said to be worth 100 oxen, Diomedes was said to have paid a “vulgar price” of just nine oxen for his humble bronze armor.
Scholars of ancient history have differing interpretations of this minor scene on the periphery of the Trojan War, where Glaucus and Diomedes faced each other as enemies. Some view the exchange of armor as a gesture of homage because the grandfathers of the protagonists were friends after all. Others construe it as one of history’s first documented fraud attempt. Under this interpretation, Diomedes feigns the friendship ritual to get his clutches on the precious armor. But whatever the true motive was, for the jurisconsults of ancient Rome the unequal swap exemplarily demonstrated the need for money as a medium of exchange, for only that way can accurate price formation take place in the trade of goods, they believed.
This anecdote reveals three things that are still true even in today’s payment transaction regimes: Payment systems have a lot to do with culture, they have to be secure and trustworthy, and they have an impact on economic value creation – and eBill is no exception. Banks in Switzerland will migrate from e-bill to eBill by the end of 2018, ushering in a new era in payment transaction processing.
1. Payment systems have a lot to do with culture.
Homer calculated the value of armor in oxen. Later cultures paid in shells, grain, oil, salt, and, of course, precious metals. The choice of medium of exchange in each case was largely shaped by local factors: What was available, storable and practical? In the 17th century, societies in Europe slowly transitioned from barter to paper for reasons of efficiency (see point 3). And to this day, culture continues to play a big role in the way we pay bills.
Fast-forward now to 2016. Companies in the USA were still settling half of their payments by check. Why? This question was discussed in a US banking forum. The explanation garnering the most agreement was: “Because the recipient doesn’t need a bank account. Because it doesn’t incur fees. Because it works even when electronic systems break down.”
It appears difficult to persuade people to adopt something new, particularly in sensitive money matters.
France and the UK also are traditional pay- by-check countries. People in Portugal prefer to make their payments through special “Multibanco” ATMs. In many African countries, “cash only” has been the rule for centuries. But that now turns out to be an advantage: Since there is no other established payment system besides cash, it is possible to skip straight to very advanced mobile payment solutions, which are only slowly gaining traction even in industrialized nations.