Emerging Methods of Payment

For the purposes of this study I must establish a starting point from which the new methods of payment emerged — the position in the middle of the 1960s perhaps, although it would not have made much difference if I had chosen the 1970s. For the present audience, coming from nearly all the countries of Western Europe, I must present a general picture and not dwell on the considerable differences in payment systems between all the countries. At that time computers were used only for maintaining the running records of the payment accounts kept with banks, savings banks and postal giros, but the payment instructions used for transfers between accounts were all paper instruments. Countries differed mainly in the proportions of giro transfers, which start with the debtor’s account being debited, and cheque transfers, in which the creditor’s account is credited before the debtor’s account is debited. Because giro transfers are not very convenient for normal shopping, notes and coin are more frequently used for small value transactions in giro countries than in cheque using countries, where cheques are often written for amounts as low as, say, four or five ECUs.