Examine the history of payments with a focus on how we pay for the things we buy, and two things stand out. First, when it comes to paying for things we buy, we clearly prefer convenience over everything else. The driver behind the evolution of new payment methods- at least over the last century- has been the desire not to be bound by the need to carry cash with us. Second, despite a convenience-driven evolutionary path that has carried mankind from the bartering system of our ancestors through early coin currencies to paper money to checking accounts, and from there, to credit and debit cards, and on through to today’s e-wallets, the nature of payments has always been transactional. At Chosen Payments we appreciate the history of payment methods, but we are here to help you navigate the future of payment processing.
In the digital age, we now have the convenience of virtual payments and many mobile payment options that allow us the freedom to pay for goods almost anywhere. In a four-part series, “Cowries, Cash & Credit – The History and Future of Payment Processing,” we will examine how we got to this point.
From Bartering to Gold and Cash
Many, many years ago, humans engaged in a bartering process. This is when two parties entered into an agreement to exchange resources and services for the benefit of both parties. While bartering worked at the time, we moved on to a more progressive form of payment around 9000 BC – livestock.
Animals are considered the oldest form of currency, with livestock such as camels, sheep and cows being the most commonly used. Some countries used grain as currency and in 1200 BC, China was the first to use shells as currency. Societies off the coast of the Pacific and Indian Oceans embraced cowrie shells as the premiere form of legal tender.
Fast forward to 700 BC and we are introduced to precious metal coins. Gold and silver coins were first used in Lydia (modern-day Turkey) and coastal Greek cities. The profiles of Gods and emperors are stamped into the medal. But we continued to develop.
Leather money came about in 120 BC and is documented as the first type of banknote. But, we moved to paper currency in 806. Paper banknotes first appeared in China at that time, but did not become widely accepted for more than 150 years later. It took centuries for the country to figure out the balance of production and inflation.
And then we strike gold – in 1812. Though it certainly was not the first time gold was part of a payment system, it officially became the standard of value in England. After centuries of banknote use, Europe moved forward with a non-inflationary production of banknotes on the bank standard. The United States adopted the practice with the Gold Standard Act in 1900.
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The path to current payment processing still has many curves and changes of course. Look for part 2 of the “Cowries, Cash & Credit – The History and Future of Payment Processing” series – From Cash to Cards.
If you have questions about the services we provide or you have a topic you would like to see covered in my blog, feel free to reach out!
Credit Card Processing | ACH | Gift/ Loyalty Cards | Mobile & Ecommerce Payments | ATM
Toll Free: 1.855.424.6736 x. 116
zach.allen@chosenpayments.com | www.ChosenPayments.com
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