We propose a theory of payments that highlights a conflict between the roles of medium of exchange and store of value. We posit that payments must involve the reciprocal transfer of a scarce reserve good, which holds value for other non-payment purposes. The theory demonstrates that agents make payments only when reserves are abundant enough and when the conflict is low. Otherwise, history-dependent equilibria arise in which an agent’s payment decision depends on the payment history of other agents within an equilibrium. The theory explains why payments frequently encounter delays and interruptions. Improving payment technologies may not reduce such fragility when reserves remain scarce and valuable for non-payment functions. The theory helps explain the evolution of money and payment systems, encompassing metallic payments before fiat money, modern bank payments, cross-border payments, and contemporary digital payment systems.