Cost of Payments Stubbornly High

Unit cost of finance in the US. Source: Philippon (2019).

Unit cost of finance in the US. Source: Philippon (2019).

Andy Haldane, Chief Economist at the Bank of England, made a speech about the move to digital payments. Despite all the innovation of credit cards, ATMs, faster payments, open banking etc., he quoted Thomas Philippon, Professor of Finance at the New York University Stern School of Business, who estimates that the unit cost of financial services has hardly changed over the last century.