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Journal ArticleDOI

Payment: Forms and Functions of Value Transfer in Contemporary Society

01 Sep 2012-Cambridge Anthropology (Berghahn Journals)-Vol. 30, Iss: 2, pp 15-35
TL;DR: In this article, the authors argue that the tolls and fees of private payment infrastructures pose challenges to critical analyses of capitalism as well as to the public interest in payment, even as they are essential to the forms and functions of value transfer.
Abstract: Renewed anthropological attention to money and finance is welcome. However, recent attention to the ghosts in the financial machine neglects the infrastructures of payment that make finance possible. Following professionals and policymakers into the clearance and settlement of payments – the means of value transfer – affords insight into an industry hotly contested by new entrants and by a few critics who find in its business model a defiance of market logic. The tolls and fees of private payment infrastructures pose challenges to critical analyses of capitalism as well as to the public interest in payment, even as they are essential to the forms and functions of value transfer. Everyday exchanges are tolled, large-scale transfers are not: the article suggests that payment is a pressing political concern, as well as an analytical one.

Summary (1 min read)

On Payment

  • Historically, private property rights have not attached to the infrastructure of exchange.
  • Nobody owns the system of making payments by writing, presenting, and clearing paper checks.
  • You provide an amount of money equivalent to the price demanded by the vendor.
  • In the case of online credits, there is a fee levied on merchants, too: for Facebook credits and iTunes, the portion taken by the electronic-value issuer is 30 per cent.

Interchange

  • As I noted earlier, the OED does not record the payments industry sense of the term interchange.
  • In particular, interchange refers to a reciprocal exchange in which one thing takes the place of another thing, and thereby stands in relation to the things around it as did the object or entity for which it was exchanged.
  • He noted that the amounts collected through such fees had become considerable, but that this was essentially an ‘accidental’ revenue stream which, though profi table, was incidental to the main operations of the bank itself.
  • Hamilton was the architect of the fi rst Bank of the United States and, with James Madison and John Jay, author of the Federalist Papers (see, e.g., Morris 1987).

Conclusion: Alternative Interchanges

  • Regulations oft en specifi cally prohibit intermediation or leveraging of funds along the payment processing chain.
  • Th ere is by now a body of excellent ethnographic scholarship on fi nancial professionals, techniques and settings, how they reshape sociality and space, how they fi gure and refi gure time, how they operate in mundane and sometimes mystical milieux (see Maurer 2005b for a review; also Hart 2012).
  • Th us, Riles notes that critical perspectives on dominant modes of fi nance tend to ‘play to’ popular conceptions of ‘virtual’ money, ‘infi nite circulation’, ‘gambling’ and ‘acceleration’ (Riles 2010: 795).

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UC Irvine Previously Published Works
Title
Payment Forms and Functions of Value Transfer in Contemporary
Society
Permalink
https://escholarship.org/uc/item/86f2w542
Journal
CAMBRIDGE JOURNAL OF ANTHROPOLOGY, 30(2)
ISSN
0305-7674
Author
Maurer, Bill
Publication Date
2012
DOI
10.3167/ca.2012.300202
Peer reviewed
eScholarship.org Powered by the California Digital Library
University of California

Payment
Forms and Functions of Value Transfer in
Contemporary Society
Bill Maurer, University of California, Irvine
Renewed anthropological attention to money and  nance is welcome. However, recent
attention to the ghosts in the  nancial machine neglects the infrastructures of payment
that make  nance possible. Following professionals and policymakers into the clearance
and settlement of payments – the means of value transfer – a ords insight into an
industry hotly contested by new entrants and by a few critics who  nd in its business
model a de ance of market logic.  e tolls and fees of private payment infrastructures
pose challenges to critical analyses of capitalism as well as to the public interest in
payment, even as they are essential to the forms and functions of value transfer. Everyday
exchanges are tolled, large-scale transfers are not: the article suggests that payment is a
pressing political concern, as well as an analytical one.
Keywords: money, payment, exchange,  nance, interchange, infrastructure
‘Interchange’ was originally a term from transit engineering. It refers to a system of
routes around an intersection that permits the smooth  ow of tra c through it (Figure
1). It is also a term from the payment card industry, but its use there was virtually
unknown outside that industry until several anti-trust lawsuits in the late 1970s.  is
industry has historically gained its pro ts from fees on transactions.  at fee makes a
transaction ‘non-par’, the value of the money and the good exchanged being unequal.
One of those fees is also called interchange.  e Oxford English Dictionary has yet
to record this sense of the term. In classic liberal and critical approaches to markets,
interchange is hard to  gure.
1
Interchange and other such fees are generally invisible to a consumer when using a
credit card or other payment technology that is not cash or a paper cheque: a gi card,
a pre-paid card, a telephone airtime card or airtime itself, Facebook credits… the list
is growing daily, as new technological means of transferring value proliferate. Industry
specialists and seminars promote events where you can ‘Join us and 1,000+ innovators
in the new money community!’
2
And interchange may be supplanted soon by the pro t
some imagine to be mined from consumers’ transactional data: the information on
what I purchase and where, not just the fee on the movement of funds from a bank to
Cambridge Anthropology 30(2), Autumn 2012: 15–35 © Cambridge Anthropology
doi:10.3167/ca.2012.300202

Bill Maurer
16Cambridge Anthropology
a merchant via a card network activated by a piece of plastic and magnetized tape in
my wallet.
3
Under its entry for ‘interchange, the OED lists a host of meanings all related to
reciprocity, in which one thing substitutes for another within the system of relations
that enmeshed the  rst thing:
e act of exchanging reciprocally; giving and receiving with reciprocity; reciprocal
exchange (of commodities, courtesies, ideas, etc.) between two persons or parties.
e change of each of two (or more) things, conditions, etc. for the other, or of one thing,
etc. for another; the taking by each of the place or nature of the other.
4
e use of the term interchange in the payments industry makes sense given the history
of clearing houses, where paper slips were ‘interchanged’ for one another to settle
credit transactions. But the de nitions create familiar if unexpected resonances for the
anthropological ear.
is paper is not just another reconsideration of Mauss, however. It is a call for a
more nuanced attention to aspects of contemporary money and  nance o en le to one
side in critical theory and anthropology. Turning to payments brings out a neglected
side of Mauss, a side that can help obviate attention to the more celebrated aspects of
his work and their relevance for contemporary  nance (cf. Appadurai 2011, 2012). It
also brings out a neglected side of money. Payments can help us see that there is more to
money than credit and debt. Money may be a ‘two-sided balance sheet operation’ (Bell
2001:151), in that money is created when a creditor accepts it from a debtor. According
Figure 1: Interchange. Courtesy of Brian Ulaszewski.

Value Transfer in Contemporary Society
Cambridge Anthropology 17
to Minsky ‘everyone can create money’ – that is, everyone can o er a means of payment
as an IOU for credit or product or service extended; the problem, he wrote, ‘is to get
it accepted’ (Minsky 1986, quoted in Bell 2001:150). Indeed, it is not ‘money’ until
someone actually does accept it (Bell 2001:152).  e determination of who will accept
your IOU in this account is based on the social relations of hierarchy in which one is
embedded, with the state assuming the position at the top of the money pyramid.  e
states money is thus the only one accepted for  nal settlement of debts.
My contribution sits to one side of this argument, however.
5
For many people in
the payments industry with whom I have been conducting  eldwork, that argument is
(mostly) beside the point. What they are interested in is not ‘who will accept my IOU?’
but what value can be mined in the act of transferring and settling it. Although they
inquire into money, and many think they are remaking it whole, their questions in the
course of their work also have to do with this value chain in payments, in clearing and
settling others’ debts and not in the credit/debt nexus itself. In fact, at the birth of the
payment card networks, it was understood that the business model would not be about
credit at all, but about tolls on settlement. As Dee Hock, founder of the VISA network,
remembered, ‘It was a revelation then. We were not in the credit card business. … We
were really in the business of the exchange of monetary value’ (original emphasis, quoted
in Stearns 2011: 45).
ere are two related points to my argument.  e rst is Minsky’s and Bell’s, about
getting your money accepted and the changing nature of the social hierarchy of money.
Some people involved in payments want to reorganize that hierarchy, replacing the state
with private actors.  e second is that by introducing tolls on settlement, payments
bring to light the excess inherent in any straightforward ‘monetary’ transaction.  at
excess sits orthogonally to the act of exchange, and de nes payment as the work
involved in settling an exchange.  eres a lot of money in that orthogonal, and that
money is the industry’s inspiration for remaking the hierarchy of money itself.
6
e stakes are shi ing rapidly, too.  e payments industry is fracturing. Mobile
telecommunications network operators, internet start-ups, mobile phone airtime
distributors, social networking services and search engines all issue various types of
pre-paid products. Legal tender from one source (a bank account, or physical cash) is
surrendered to a third party that converts the cash into some kind of electronic value.
at value is then available for transfer to another at the point of sale, online, or over the
wireless network. Regulatory changes in the U.S. and EU, meanwhile, are cutting into
the fees levied by the traditional networks. Revenue from interchange is dwindling for
the major card networks just as hundreds of new start-ups from mobile and computing
are entering the game.  ose new players are discovering other potential in payments.
I have been conducting  eldwork on emerging payment systems, particularly
mobile phone enabled systems that allow for person-to-person transfers of funds, since
2007. It was in that year that my work on the anthropology of  nance and money
attracted the attention of a couple of anthropologically inclined people working in an
information technology company (Intel) and a philanthropic organization (the Bill and
Melinda Gates Foundation). Both organizations were interested in new mobile phone
enabled  nancial services. None of us knew at the time that we would become interested
in ‘payment’ speci cally, much less ‘interchange. My colleagues wanted to move the

Bill Maurer
18Cambridge Anthropology
conversation in IT companies about money away from security and encryption, and
toward the social and meaningful uses of money. My colleagues in philanthropy were
interested in whether the rapid spread of mobile could be harnessed to provide poor
people access to the formal  nancial sector, which they deemed safer, more reliable
and cheaper than informal moneylenders or remittance agents.
7
Both had taken a keen
interest in a service called M-Pesa, a product of the Kenyan mobile network operator,
Safaricom. M-Pesa allows clients of Safaricom to send small sums of money to each
other via a text message sent over the mobile network. Funds were pre-loaded into a
clients account at one of hundreds – now thousands – of M-Pesa agent locations, which
were generally also sellers of airtime credits for making voice calls. Recipients then
encash the funds sent via text at another agent location (see Mas and Morawczynski
2009; Maurer, Nelms and Rea 2013). A curiosity at the time, M-Pesa grew at a truly
phenomenal rate, reaching over half of all Kenyans by 2010 and processing 35 per cent
more transactions in 2011 in Kenya alone than were sent over the entire global Western
Union wire service in that year.
8
In the intervening years, over ninety similar so-called
mobile money services have sprung up around the world.
e rise of M-Pesa and the beginning of my research coincided also with the
onset of the global  nancial crisis, where, as Appadurai and others have argued, credit
reappeared as the shaky foundation and perennial undoing of capitalist  nance. I vividly
remember a January 2010 meeting on mobile money at the U.S. Federal Reserve in
Washington, DC. A government o cial stood up and said that in the wake of the credit
crisis, ‘ nancial innovation’ had become a bad word. And yet, with mobile money, he
said, ‘it is refreshing to be discussing  nancial innovations that raise welfare.
While this article is primarily a thought piece, it may be helpful to place it in
the context of my ongoing  eldwork. is eldwork has consisted of attending and
occasionally speaking at over twenty industry, regulatory, and aid-related conferences
and workshops devoted to mobile money, together with thirty formal and scores of
informal interviews on  ve continents with people ranging from payments industry
professionals, developers, investors, IT and mobile specialists, product and systems
designers, banking and  nance professionals, and employees of the major card networks,
to consultants, NGO workers, development aid specialists, regulators, other government
employees, and more. Some have become friends, and many have become colleagues
and collaborators. I have been asked to write letters of reference for some of them; others
have helped me write grant proposals and gain access to venues from which I otherwise
would have been excluded. Many of us share a fascination with value and money. Not a
few of us have participated in alternative currency systems or unconventional property
arrangements, and maintain collections of money paraphernalia (vintage bill organizers;
mid-twentieth-century charge card imprinters). One tried to live without cash for as
long as he could, relying only on digital forms of payment. Another tried to live only
with cash.
9
I count myself part of a community that has come up together in and with
mobile money.
10
With ‘mobile, we initially imagined ourselves primarily involved in a new o shoot of
the mobile telecommunications industry. We wanted to attach this o shoot to banking;
some of us referred to mobile money as an ‘onramp’ to formal banking (see Maurer
2012). What many of us did not realize is that we had been coming hard on the heels

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  • ...As Maurer (2012b, 2015) has argued, payment is undertheorized in social science....

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  • ...The success of M-Pesa proved inspirational for many in the information technology sector who heretofore had not thought much about payments (Maurer, 2012a)....

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References
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Book
01 Jan 1867
TL;DR: In the third volume of "Das Kapital" as discussed by the authors, Marx argues that any market economy is inevitably doomed to endure a series of worsening, explosive crises leading finally to complete collapse.
Abstract: Unfinished at the time of Marx's death in 1883 and first published with a preface by Frederick Engels in 1894, the third volume of "Das Kapital" strove to combine the theories and concepts of the two previous volumes in order to prove conclusively that capitalism is inherently unworkable as a permanent system for society. Here, Marx asserts controversially that - regardless of the efforts of individual capitalists, public authorities or even generous philanthropists - any market economy is inevitably doomed to endure a series of worsening, explosive crises leading finally to complete collapse. But he also offers an inspirational and compelling prediction: that the end of capitalism will culminate, ultimately, in the birth of a far greater form of society.

6,401 citations


Additional excerpts

  • ...(Marx 1901,vol....

    [...]

Book
Hyman P. Minsky1
01 Jan 1986
TL;DR: In his seminal work, Minsky presents his groundbreaking financial theory of investment, one that is startlingly relevant today as mentioned in this paper, explaining why the American economy has experienced periods of debilitating inflation, rising unemployment, and marked slowdowns and why the economy is now undergoing a credit crisis that he foresaw.
Abstract: "Mr. Minsky long argued markets were crisis prone. His 'moment' has arrived." -The Wall Street Journal In his seminal work, Minsky presents his groundbreaking financial theory of investment, one that is startlingly relevant today. He explains why the American economy has experienced periods of debilitating inflation, rising unemployment, and marked slowdowns-and why the economy is now undergoing a credit crisis that he foresaw. Stabilizing an Unstable Economy covers: The natural inclination of complex, capitalist economies toward instability Booms and busts as unavoidable results of high-risk lending practices "Speculative finance" and its effect on investment and asset prices Government's role in bolstering consumption during times of high unemployment The need to increase Federal Reserve oversight of banks Henry Kaufman, president, Henry Kaufman & Company, Inc., places Minsky's prescient ideas in the context of today's financial markets and institutions in a fascinating new preface. Two of Minsky's colleagues, Dimitri B. Papadimitriou, Ph.D. and president, The Levy Economics Institute of Bard College, and L. Randall Wray, Ph.D. and a senior scholar at the Institute, also weigh in on Minsky's present relevance in today's economic scene in a new introduction. A surge of interest in and respect for Hyman Minsky's ideas pervades Wall Street, as top economic thinkers and financial writers have started using the phrase "Minsky moment" to describe America's turbulent economy. There has never been a more appropriate time to read this classic of economic theory.

3,031 citations

Book
01 Jan 2006
TL;DR: Gibson and Graham as discussed by the authors describe a politics of possibility that can build different economies in place and over space, and argue that post-capitalist subjects, economies, and communities can be fostered.
Abstract: Is there life after capitalism? In this creatively argued follow-up to their book The End of Capitalism (As We Knew It), J. K. Gibson-Graham offer already existing alternatives to a global capitalist order and outline strategies for building alternative economies. A Postcapitalist Politics reveals a prolific landscape of economic diversity-one that is not exclusively or predominantly capitalist-and examines the challenges and successes of alternative economic interventions. Gibson-Graham bring together political economy, feminist poststructuralism, and economic activism to foreground the ethical decisions, as opposed to structural imperatives, that construct economic "development" pathways. Marshalling empirical evidence from local economic projects and action research in the United States, Australia, and Asia, they produce a distinctive political imaginary with three intersecting moments: a politics of language, of the subject, and of collective action. In the face of an almost universal sense of surrender to capitalist globalization, this book demonstrates that postcapitalist subjects, economies, and communities can be fostered. The authors describe a politics of possibility that can build different economies in place and over space. They urge us to confront the forces that stand in the way of economic experimentation and to explore different ways of moving from theory to action. J. K. Gibson-Graham is the pen name of Katherine Gibson and Julie Graham, feminist economic geographers who work, respectively, at the Australian National University in Canberra and the University of Massachusetts Amherst.

1,561 citations


"Payment: Forms and Functions of Val..." refers background in this paper

  • ...Th e card networks’ refusal to fi ght in court and the diffi culty of explaining in standard economic terms the pricing of debit interchange are further evidence of the oddity, from a capitalogocentric (Gibson-Graham 2006) perspective, of interchange....

    [...]

Book
01 Jan 2011
TL;DR: In this paper, anthropologist David Graeber presents a stunning reversal of conventional wisdom: 5,000 years ago, during the beginning of the agrarian empires, humans have used elaborate credit systems.
Abstract: Every economics textbook says the same thing: Money was invented to replace onerous and complicated barter systems—to relieve ancient people from having to haul their goods to market. The problem with this version of history? There’s not a shred of evidence to support it. Here anthropologist David Graeber presents a stunning reversal of conventional wisdom. He shows that 5,000 years ago, during the beginning of the agrarian empires, humans have used elaborate credit systems. It is in this era, Graeber shows, that we also first encounter a society divided into debtors and creditors. With the passage of time, however, virtual credit money was replaced by gold and silver coins—and the system as a whole began to decline. Interest rates spiked and the indebted became slaves. And the system perpetuated itself with tremendously violent consequences, with only the rare intervention of kings and churches keeping the system from spiraling out of control. Debt: The First 5,000 Years is a fascinating chronicle of this little known history—as well as how it has defined human history, and what it means for the credit crisis of the present day and the future of our economy.

1,481 citations

Posted Content
TL;DR: Tobin this paper argued that the main problem today is not the exchange rate regime, whether fixed or floating, but the excessive international mobility of private financial capi- tors.
Abstract: a system of pegged parities that relied on the debts in reserve currencies, mostly dollars, to meet growing needs for official reserves. Trif fin and his followers saw the remedy as the internationalization of reserves and reserve assets; their ultimate solution was a world central bank. Others diagnosed the problem less in terms of liquidity than in the inadequa cies of balance of payments adjustment mech anisms in the modern world. The inadequa cies were especially evident under the fixed parity gold-exchange standard when, as in the 1960s, the reserve currency center was struc turally in chronic deficit. These analysts sought better and more symmetrical "rules of the game" for adjustments by surplus and deficit countries, usually including more flexi bility in the setting of exchange parities, crawling pegs, and the like. Many economists, of whom Milton Friedman was an eloquent and persuasive spokesman, had all along advocated floating exchange rates, deter mined in private markets without official interventions. By the early 1970s the third view was the dominant one in the economics profession, though not among central bankers and private financiers. And all of a sudden, thanks to Nixon and Connally, we got our wish. Or at least we got as much of it as anyone could reasonably have hoped, since it could never have been expected that governments would eschew all intervention in exchange markets. Now after five to seven years?depending how one counts?of unclean floating there are many second thoughts. Some economists share the nostalgia of men of affairs for the gold standard or its equivalent, for a fixed anchor for the world's money, for stability of official parities. Some economists, those who emphasize the rationality of expectations and the flexibility of prices in all markets, doubt that it makes much difference whether exchange rates are fixed or flexible, provided only that government policies are predictable. Clearly, flexible rates have not been the pana-, cea which their more extravagant advocates had hoped; international monetary problems have not disappeared from headlines or from the agenda of anxieties of central banks and governments. I believe that the basic problem today is not the exchange rate regime, whether fixed or floating. Debate on the regime evades and obscures the essential problem. That is the excessive international?or better, inter currency?mobility of private financial capi tal. The biggest thing that happened in the world monetary system since the 1950s was "This paper is Prof. Tobin's presidential address at the 1978 conference of the Eastern Economic Association, Wash. D C.

977 citations


"Payment: Forms and Functions of Val..." refers background in this paper

  • ...Hence, perhaps, the strenuous resistance from fi nancial professionals to a similarly certain revenue stream to be generated by a toll on large-scale transactions – a Tobin Tax – not just everyday small-scale transactions....

    [...]

  • ...Th is is the proposal of those supporting a ‘Tobin Tax’ (Tobin 1978)....

    [...]

  • ...Neither interchange nor a Tobin Tax would have ‘risk at its very heart’ (ibid....

    [...]

Frequently Asked Questions (1)
Q1. What have the authors contributed in "Forms and functions of value transfer in contemporary society" ?

In this paper, Riles pointed out that critical perspectives on dominant modes of finance tend to play to popular conceptions of virtual money, i.e., ‘ infinite circulation ’, ‘ gambling, and ‘ acceleration ’.