The feasibility of the payment system decides the feasibility of the business. You can run a business if your payment system allows you to send and receive payments easily. Currently, there are plenty of payment systems, so starting and running any business is quite easy. Sellers have many options like card payments, QR Code payments, Cash payments and even contactless payments.
Things were not always like that. With the evolution of humans, technology and lifestyle, payment systems have also evolved. Earlier, there was no concept of international payments, and customers had only limited options for shopping.
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However, do you know how payment systems have evolved over the years? And what was it like doing business in olden times compared to today? Most people have yet to learn about this.
Therefore in this blog, we tell our readers how the evolution of payment systems has made their lives easy.
What is the oldest payment system in the world?
Since the existence of humans in this world, trade has been carried out. People used to exchange goods instead of cash or coins. However, this was the first payment system in this world, the exchange of goods. And this was known as the bartering system. People used to give away the goods they had in surplus in exchange for goods they didn’t have. Compared to modern online payment solutions, everyone had to provide some goods to get other goods.
Evolution 1: The First Coins
The first major evolution in payment systems dates back to 1100 BC. For the first time, the Chinese introduced coins to the world. The coins were made of precious metals like silver, gold and copper. In the bartering system, there were a lack of uniformity and no transparency in the evaluation of goods.
Therefore each coin had its value, and people could buy goods worth the value of that coin. The modern paper currency system originates from that era. And papers became part of the payment system in the 11th century. Imagine what our world would be like without coins or paper currency. There would have been no concept of merchants and merchant solutions. Everyone would be a merchant and consumer at the same time. Moreover, the coins were a major evolution of the payment systems and significantly contributed to simplifying businesses.
Evolution 2: Cashless Payments
The next major evolution in payment systems is the arrival of cashless payments. Suppose a hundred years before, if someone had asked for cashless payments, everyone would have mocked that person. But today, everyone is well aware of cashless payments and is more or less dependent on them.
Cashless payments are mostly card payments, either credit or debit cards. Credit and debit cards date back to the 1960s and were introduced in Britain for the first time. The concept of card payments was that a cardholder could buy things on the guarantee of issuing banks.
However, credit card machines are equipped with built-in card readers, scanners, and magnet strips, which help them to verify the cardholder’s info and request the due transaction of the due amount to the card issuing bank. For this, merchants are given a merchant terminal known as the payment processor.
Moreover, credit debit card payments undoubtedly revolutionized the customer experience of shopping. Customers can now roam without cash only because of the cashless payments facility.
Evolution 3: Online Payments
Till the 1990s, customers could only shop from nearby shops. There was no concept of online shopping until 1994. As time passed, technology evolved so did the payment system. Like the internet, this system also took everything by storm.
As of today, customers can buy anything from anywhere in the world. Apart from customers, sellers also can sell their products worldwide. When it comes to payments, there are payment gateways, online gateways specifically, helping sellers to receive payments online.
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Online payment systems have revolutionized the buying and selling experience over 360 degrees. A buyer can order anything from home; the same goes for merchants. Contrary to the times when customers had to go to markets in the hunt for their desired products. And had to spend hours searching for those products. Now everything has come to our fingertips for customers and sellers just because of the online payment systems. There are notable payments gateways like PayPal, G Pay, Apple Pay, Stripe etc., helping customers to pay their bills online.
Conclusion
Payment systems have a history as long as human existence. The first traces of the payment system are in the form of the bartering system. Over time coins replaced that system, then paper currency. Now payments via card and online payments lead the payment systems.
Precisely the evolution of technology and the evolution of payment systems has made businesses very easy. Earlier, only people with huge investments and resources could do business. Now, anyone can start a business with or without investment.