The Ever Changing Face of Money and Payment

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

The birth of money

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 evolved from bartering to the exchanging of livestock for services. This is considered the oldest form of money, and laid the groundworks for all the changes that were to come thereafter.

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Medium of exchange

Skipping a few thousand years (no big deal), and payment had evolved again. The exchanging of animals for services and goods gave way to the exchanging of smaller things. For example money became the shekel, shells, crude metal and then precious metal coins.

Gold and silver coins can be compared to the shrapnel used in today’s society. It was in ancient Lydia (modern-day Turkey) and a few Greek cities that coins were first introduced. Profiles of the gods and emperors of the time were stamped on these coins. Nowadays, small shrapnel and coins are generally just seen as ‘pocket change’ or used to help teach young children about financial literacy. Whereas back in the years B.C., coins were the only way in which to make a payment and do an exchange.

Small coins started to become replaced a few hundred years in the future. First of all there was leather money, made mainly of white deerskin. These could be considered the earliest prototype of banknotes and development of paper money. However, these were soon fazed out following rampant inflation.

Gold is money

Gold is officially made the standard of value in England 200 years later. Followed by the 1900s in which saw the creation of the gold-backed U.S. Dollar. However, this was changed by President Nixon in 1971 as it had become outdated. The most widespread changes in payment took place in the later part of this century. Credit cards were introduced in the 1950s.

And now, in the digital age, these widespread changes have been built upon two-fold. There is such a thing as technology driven payment. This involves the convenience of virtual and mobile payments options that allow a freedom when it comes payment. This freedom has been unmatched at any other point in history.

With the likes of a credit card swiper and ATM machines anybody can manage financial transactions. Anyone who wishes to make money has easy means with which to interact with customers. 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 (technology driven payment systems) 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. Mobile commerce was first introduced in 1994 and 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. However, 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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