The PAYTECH Book

Payments as a Service

By Julian Sawyer

Co-Founder and former COO, Starling Bank

It was the economic historian Tim Harford, in his excellent book (and BBC Podcast) 50 Things That Made the Modern Economy,¹ who outlined how the electric dynamo transformed the way factories, over 100 years ago, powered their industrial output. Before that, if you owned a factory you also had to create your own power, typically with coal power/steam generation which turned turbines that powered the plant via massive shafts running through the factory floor. Then came the electric dynamo, but this still required generation. Moving forward to today, we have specialists who create electricity in the most efficient ways (coal, nuclear, wind) and are able to distribute it anywhere in the country – in a consistent manner (i.e. at 240 V), not hampered by surges in demand and all with a predictable price point.

This was a fundamental disruptive shift in manufacturing, enabling factories to focus on their value-added activities of making things and let others worry about some of the inputs such as electric power.

Has the time come for a similar change in payments? In this chapter I propose that the answer is yes, it is time for a change that will shift how people consume payments, opening access to payments to organizations that would struggle to gain access to consistent and immediate payments with a known and consistent pricing.

Let’s look back at the UK payments infrastructure over the last 10 years. ...