In the age of the Crusaders, the most dangerous part of a pilgrimage to Jerusalem wasn’t the prayer – it was the cash.
With bandits, shipwrecks, and bad luck along the way, it was easy for a traveller to lose their savings long before they reached the Holy Land.
Out of that insecurity, the Knights Templar built a cross-border money network that made travel possible for people who couldn’t afford to be robbed.
Why pilgrims needed a safer way to pay
The order began to operate in the early 12th century as protection for pilgrims, but that protection quickly turned into logistics.
The Templars established houses across Western Europe and the eastern Mediterranean, each with storage, staff, and paperwork.
A papal bull in 1139 granted them special privileges and put them under direct papal authority, helping them operate across dioceses and kingdoms with fewer local obstacles than most institutions.
That legal umbrella mattered because medieval money was, as would be expected for the period, local.
Coins varied by region, weights and purity shifted, and rulers loved to “recoin” when it suited them.
A long journey meant juggling currencies and the constant risk of robbery.
What pilgrims needed was a trustworthy promise: “Your value is safe, and you can claim it later.”
The Templars’ letters of credit and a medieval payments network
Their solution was practical.
A traveller could deposit their cash, jewels, or documents in a Templar house close to home and receive a written acknowledgement of the value deposited.
Weeks later, the pilgrim could present that document at a different Templar house and withdraw funds there, often in local currency and in stages as expenses arose.
In modern terms, it was like a cheque crossed with a prepaid account: the customer traveled with paper, while the value stayed inside the order’s ledgers.
Tim Harford, in a BBC article, dubbed Temple Church “the Western Union of the crusades.”
This comparison fits like a glove: the order charged fees, converted currencies, and relied on internal records so withdrawals in Jerusalem matched deposits in London.
It was an early stage of what would come later – the global banking system Londoners use today for different things such as the best online slots platforms, online payments, international e-commerce.
And everything started with the Templars.
Heads of state and religious leaders were among their customers
Because people trusted the Templars, the service spread beyond pilgrims.
The order handled deposits, transfers, and large payments for kings and churchmen.
In England, King John placed his crown jewels with the Templars at Temple Church, using them as a high-security vault, and the system could be genuinely intentional.
In 1249, Pope Gregory IX routed revenues from Scotland, Ireland, and England through the Templars in Paris so creditors could be paid via letters presented at the Paris Temple.
By the 13th century, the Temple in Paris was entwined with royal administration.
Historians note that the treasurer of the Paris Temple was treated as a figure of state finance, proving that the order’s accounting skills were part of politics as well, not only pilgrimage.
What came after the Templars
Calling the Templars the “first bankers” makes a great headline, but history is messier.
Credit instruments existed long before, with references to bill-of-exchange-like tools dating back as early as the Eighth Century among Arab merchants, with widespread use in 13th-Century northern Italy.
What the Templars helped normalise in Latin Christendom was the idea that a far-flung organisation could clear payments across regions through bookkeeping, reputations, and shared procedures, an early international payments utility.
That idea didn’t die when the order was suppressed in the early 14th Century.
Merchant-bankers, especially in the Italian city-states, refined the logic with bills of exchange, branch networks, and trade finance.
Later, banking fused with government debt and monetary policy as central banks emerged from commercial banks, with the Swedish Riksbank dating to 1668 and the Bank of England founded in 1694 to act as banker to the government.
Modern banking adds regulation and digital rails for Londoners, but the core concept that value can travel safely when trusted institutions keep records and honour promises is familiar
In that narrow but important sense, the Templars didn’t invent money – they helped invent the confidence that lets money move.
Feature image: Free to use from Unsplash
Join the discussion