The global financial crisis has made all of us revisit the basics of banking. A better understanding of the importance of payments to a bank's overall health can help bankers manage customers' behavior for greater long-term profit.

Since the very beginning of deposit banking three centuries ago, people have kept surplus money in accounts, like checking accounts, that provided immediate access to their funds even when less liquid accounts like CDs, notes and bonds offered far better interest rates. Customers are paying the bank the difference between what they are earning in liquid accounts and what they could earn elsewhere, for the ability to quickly access their funds. This liquidity premium accounted for fully one-third of bank revenues in 2007. And when various service fees, and the premium for credit card loans and overdraft coverage are added in, the business of providing consumers with the banking infrastructure to make payments of various kinds accounted for 65% of revenue.

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