The Ever Changing Face of Payment

The history of money dates all the way back to 350 B.C. — it’s that old even Aristotle had something to say about it. Although financial exchanges had evolved with civilisation, the fundamentals of money have never really changed — it’s always concerned carrying out transactions and exchanging one thing, for another.

The earliest transactions involved each party exchanging resources and services for the benefit of the other; this was known as bartering and was a simpler time when one good deed was met with another. Payment then made what was probably its biggest change: it evolved from bartering to the exchanging of livestock, such as cows, sheep and even camels, for services. This is considered the oldest form of currency, and laid the groundworks for all the changes that were to come thereafter.

Skipping a few thousand years (no big deal), and payment had evolved again as the exchanging of animals for services and goods gave way to the exchanging of smaller things, such as: the shekel, shells, crude metal and then precious metal coins. Gold and silver coins that can be compared to the shrapnel used in today’s society, was first used in ancient Lydia (modern-day Turkey) as well as in a few Greek cities. On these coins, profiles of the gods and emperors of the time were stamped, much like the way in which Queen Elizabeth’s profile is stamped on the coins used in Britain. Nowadays, small shrapnel and coins are generally just seen as ‘pocket change’ or used to help teach young children about financial literacy, but back in the years B.C., coins were the only way in which to make a payment and do an exchange.

But jumping forward, just a few hundred years this time, and small coins were beginning to be partnered by other styles of payment. First of all there was leather money, made mainly of white deerskin and what can be considered the earliest prototype of banknotes, and then there was paper money. However, the balance of production and inflation meant that this type of money was soon fazed out, leaving a gap in the market for a new legal tender, which was filled in Native America by the wampum in 1637.

200 years later — gold is officially made the standard of value in England. This was then met by the gold-backed U.S. Dollar in the 1900s, which was, in 1971, changed by President Nixon as it had become outdated. It was this century when the most widespread changes in payment took place, as credit cards were introduced in the 50s.

And now, in the digital age, these widespread changes have been built upon two-fold. There is such a thing as technology driven payment, of which you are probably aware, which is the convenience of virtual and mobile payments options that allow a freedom when it comes payment that has been unmatched at any other point in history. With the likes of a credit card swiper and an ATM machine, anybody who wishes to make money, i.e. a business, would be able to take any transaction that there prospective customers wish to make. With the pace of change in the U.S. payment market showing that over the past five years the credit card has proved itself to be the generally preferred method of payment, merchant services (services that deal with technology driven payment) are ones that must be optimised if a business owner wishes to retain custom. As well as this, shopping from smartphones and tablets, otherwise known as mobile commerce, is expected to hit $114 billion in 2017, meaning that that, which was first introduced in 1994, shows no sign of slowing down.

Who knows what the next form of payment will be? Can it evolve any further than it already has? It’s hard to see it ever being able to, but that’s probably what those of past generations were saying about the animals, shells and deer skins that they were using to exchange!

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