A Brief History of Digital Payments

A Brief History of Digital Payments – The use of cash and cheques have been declining for quite some time and digital payments are increasing as well. When you look at countries such as Sweden, you will soon find that they are well on their way to becoming a cashless economy. This journey has been continuing for quite some time and physical cash is also making much less sense. If you want to find out more about the milestones that have been taking place, then you can find out more below.

The Internet

Digital payments have been linked to the start of the internet. This can be traced all the way back to ARPANET which was actually developed by the US during the Cold War. It was then launched right at the end of the 1960s. It was in 1989 when the concept of website pages and websites could be linked together, and this then started the World Wide Web. Digital payments became much more realistic and this really helped everything to advance.

The First Online Payment

Online payments started out in the 1990s and the Stanford Federal Credit Union was one of the very first institutions to offer any kind of banking services. This happened in 1994 but the online payment system was not very friendly at all. It really did require specialised knowledge of data protocol and it also required you to have a good understanding of coding as well. Early players when it comes to digital payments included ECash and even Millicent as well. They offered services which used electronic alternatives and even micropayments as well. This included tokens and digital cash. The founding of Amazon happened in 1994 and this provided further access to the general public while also furthering the digital payment efforts.

PayPal

One of the earliest companies to actually specialise in online payments was PayPal. They began as an online transfer service in the year 1999. The popularity with Ebay users soon took off. PayPal has been continually innovative and there are also payments that could be made by using email or even addresses. The addition of currencies and even payment apps then took off and people even started using reverse Turing tests to try and reduce fraud. This helped people to know if it was a machine using the payment platform or a human. PayPal was soon targeted by established institutions and even banks. Ebay was also included and they attempted to have the company classified as a bank or even an unsecured service. Ebay managed to acquire the company in the year 2002 and they owned by 2015. This was the moment when it was spun off as being a separate company. Paypal is also one of the online banking methods in an online casino, which shows how far it has come.

Digital Payment Companies

Digital payment companies have become major players so far and when you look at eCommerce and online banking you will soon see that they have grown very quickly. Numerous digital payment companies have emerged as being huge players. PayPal has also been awarded an EU banking license and by this time they had over 35 million customers. After Ebay spun-off the company, PayPal then tried to do everything they could to reduce frictions around payments while also providing customers with a fantastic service. Ever since then, PayPal have grown, and they have even acquired iZettle which is a Swedish payment company. They offer low-cost payments and even point-of-sale gadgets. This helped them to expand and it also gives PayPal the chance to really push their business forward.

Digital Wallets and Apple Pay

Digital wallets might have been around for quite some time, but they have gained quite a lot of traction when you look at the Millennial generation. They can be linked to bank accounts or even to payment cards. When this has happened, they can then be synced with contactless technology as well. When Apple Pay launched in the year 2014, it was a significant improvement. The functionality alone of being able to add a payment card by taking a photo of it really helped them to take off. On top of that, you could also authenticate payments by using the fingerprint scanner. Credit card providers can now pay the company a fee every time the transaction is made. Online giants such as Amazon or even Google are able to offer digital wallet functionality as well. Google Pay gives users the chance to send money and even split restaurant bills in some instances. Amazon Pay also give you the chance to single-click the checkout process which is another huge benefit.

Virtual Banking

The development of payments has opened the way when it comes to virtual banks and it also helps customers to conduct their financial transactions over the internet. In the year 2011, ePayments then launched and this gave small businesses the chance to work with individuals to give them a much more cost-effective way to make domestic or even international payments. The virtual bank accounts that are being offered by ePayments are giving people the chance to make secure payments while also being able to manage all of their accounts.

Cryptocurrency

The concept of a currency that is completely decentralised is revolutionary. Using cryptography to allow untraceable and automated payments is beneficial, but it’s important to know that it has been around for decades. It really did take off when Bitcoin launched in the year 2009. A lot of cryptocurrencies use some kind of blockchain technology. This was invented in the year 2008 and it was meant as a way to serve the public. A blockchain is a list of records, or essentially, blocks that are all linked together via cryptography. Each blog is a scrambled version of the last one, but it does contain a timestamp of when the transaction was made. Cryptocurrency is regarded as being the next major step when it comes to currency and it has made a huge difference to the wold.