By Published On: October 2nd, 2020Categories: EducationComments Off on The Evolution of Payment Methods Over Time

Planet Earth has evolved. We have reached the 21st century having gone through a long history of finding solutions that facilitate our day to day lives.

Since the beginning of humanity, we’ve had to use different payment methods to obtain resources. In this article I will give you an explanation of what’s happened during this process.

Economic transactions, or the payment for the acquisition of goods or services, is something so common in our lives that we do it several times in the same week or even on the same day. It’s undoubtedly interesting to learn about the history of these agreements starting with bartering and ending with our present day technologies. Let’s go!

Barter and the introduction of coins for payment

It is important to know that before any payment method was invented, the human being satisfied his needs through hunting. The preservation of the spoils was almost non-existent, so there was no need for trade. Then, with the passage of time livestock and agriculture began to appear, and other items that enabled the exchange of some objects for others.

As a result, the first form of economic transaction appeared. It was called barter, and it became official as the first method of payment used by humanity. Barter (a word that comes from the Catalan “trocar”, and its translation to English would be to hit), got its title due to the shock or hit that occurred between the hands when closing a deal.

This method of payment dates back to 6000 BC, and it involved giving values to different objects that were used in the buying and selling of goods. Cows, salt, pepper and feathers were some of the objects that many used for trade.

Then in the 7th century B.C., the round objects that we all know today as coins were introduced. These were made from precious metals (gold, silver and bronze), so their value had a real correspondence, depending on the weight and metal from which they were made. China was the first country to use it as a method of payment or exchange, and it was in the 16th century that currencies began their boom in Europe.

It is very important to know that the faces of relevant characters in history were used in the stamping of the coins, such as Alexander the Great. It became frequent to stamp coins with the face of a sovereign, the figure of a god or some other symbol, because this guaranteed their purity and the weight of the material with which the coin had been minted.

Currency in coin form is still used in many countries of the world as a payment method, although, it should also be mentioned that in other countries its value is not so high and its use is quite scarce. One of its biggest problems throughout its history was that it became difficult and uncomfortable to use and transport, so the governors decided to implement a new easier payment method with cheaper production costs.

Bills: beginning and development

The method that unseated the currency was: the bill or paper money.

This came as the beginning of the fiduciary system, in which the value was no longer held by the means of payment itself.

In China, the first bill was used in 1170. There, copper was very difficult to get, and it wasn’t possible to mint enough metallic money.

In Europe, the bills appeared in Sweden in the 17th century, by the money-changer Johan Palmstruch. He gave them as a “receipt” for those who deposited gold or other metal in the Bank of Stockholm, which he had founded himself. The bills were distributed by the banks, and their use was spreading throughout the continent.

In 1635, when the French colony’s government in Canada distributed the bills, they gave them to the soldiers so that they could use them as a method of payment.

In 1780, they arrived in Spain, being quickly accepted for the comfort they presented in front of heavy bags of coins.

In Latin America, specifically Venezuela, the bills were issued for the first time in 1811 by the republican government. Francisco de Miranda presented a project that year, to issue a paper money to support the income of tobacco and coffee in Venezuela. Congress authorized by law the issuance of the bills on August 27th, 1811, and on November 18th, they began their circulation.

As a main characteristic, the bills around the World come with striking colors for the eyes of merchants and users, in different denominations, and like the coins, the faces of famous and important people, or typical monuments of each nation are stamped on them, seeking to enhance the culture of the country, a practice that continues currently.

Creation and use of checks

Checks are a traditional payment instrument to this day, through which bank customers can dispose of their funds deposited in checking accounts.

Checks were widely used from the 80s and 90s. This service is provided free of charge by banking institutions to merchants and recipients of the checks for the prior verification of validity and the sufficiency of funds in the issuer’s account.

As a curious fact, in Venezuela the first check was issued in February 1897. Usage grew over time, until checks became the primary payment method there. Nothing lasts forever, though, and checks would be superseded by a new payment method created from the eruption of the Internet in the world.

payment

The appearance of debit and credit cards

The modern age of payments brought debit and credit cards. These are documents of plastic or metal material issued by a bank or specialized institution in a person’s name. Credit cards can be used to make purchases without having to pay in cash and allow people to postpone the payment to future months.

It is amazing to know that the first credit card was not issued by a bank. In 1914, Western Union created a loyalty card for its most select customers, which also allowed access to get more credit.

Today’s biggest issuer, VISA, has its origin in the Bank AmeriCard which was launched by the Bank of America in 1958. That same year American Express was also born.

In Europe the first credit card was introduced by Barclays in the United Kingdom in 1966, inspired by the card that Bank of America launched in 1958.

The first universal credit card was issued by Diner’s Club in 1950 which was accepted in many establishments.

As for debit cards, these were launched in 1987. Paying on a debit card directly applies the charge to the person’s checking or savings account. Compared to credit cards, they usually have a lower limit of funds that the person can use to buy or consume services. However, credit card issuers charge the merchant a percentage for this service and in some cases a fixed annual fee to the holder.

20th century and electronic commerce

With the arrival of the Internet and technological advances, the owners of companies large and small found a new way to market their products. Web pages were a next-generation technology that favored the development of exclusive companies online, and made it easier for customers to acquire their goods and services.

In the 2010s, the rise of smartphones changed the consumption habits of users, as they started to make more and more purchases online through their mobile phones. This development resulted in banks and businesses creating mobile applications for customers to access their accounts and make payments quickly and easily while on the go. This was an environment that laid a great foundation for the next step in the evolution of payments.

21st century ushers in a digital age: Cryptocurrencies for payment

Today, cryptocurrencies have arrived as a payment method that will undoubtedly make a mark on the economy of any country in the world. They are a high-tech way to pay for things now and for the foreseeable future.

The first digital currency to break into the world economy was Bitcoin. It allowed payments on a completely decentralized ledger called a blockchain, maintained by computer servers around the globe. Because of this innovator and trailblazer, others began to make their way into the market. The most important are Dash, Litecoin, and Ethereum, among others.

Dash: The cryptocurrency with innovative methods

Since its arrival, Dash has been a cryptocurrency that has been of help to many countries in Latin America, Europe, Africa and Asia. It’s really helping to stabilize the economy of countries of those continents. Dash provides all of its users a safe way to buy and sell, or cancel their orders if they need to without worrying about currency devaluation due to the constant economic changes that occur within each nation.

Dash goes hand in hand with blockchain technology, and presents state-of-the-art payment methods, which are to the taste and preference of the 21st century customer. Dash works in the new economy since it has adapted to the user’s needs, and because it took everything positive from the previously mentioned payment methods. Dash offers speed, security, and optional privacy, with a modern user interface right around the corner. It’s a complete package.

Dash has also made many partnerships with different small and large-scale companies, providing the public with a speed and efficiency that only Dash can offer. Dash can be used with a digital wallet or a text message. Yes, a text message. Services such as Dash Text allow a customer to make a payment in a simple and accessible way.

The evolution of payments has certainly reached a high point, with modern technologies changing the way we do business. Cryptocurrencies such as Dash have begun to command the preference of users. Despite the fact that cryptos have not been fully established at this point, their rise is unstoppable. They will become leaders in the future world economy, and I can’t wait to see where we are in a few more years.

About the Author: Aldo

Venezuelan Teacher and Writer! I'm positive and strong. Tips graciously accepted: XoXNCV4jQ1QWp1g1c6cEsx4R7xKJKKaNmR

Dash Nation is always on the lookout for talented writers for news and blogs. If you wouldn’t mind sharing your talents with the movement towards financial freedom through Dash, please contact the team at go.dashnation@gmail.com.

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