The digital age has brought many technological revolutions with it, and perhaps one of the more overlooked developments is how we process payments. Payment processing affects every facet of our daily lives – in stores, online, at the bar – and when little conveniences like contactless and mobile payments become so common, it can be easy to overlook how far we’ve come from the days of checks or days-long bank transfers.
But as with all technology, it’s not enough to say payments are simply quick. Whether it’s in our leisure, our shopping or paying our bills, people want things instantly, and there’s a reason they will often walk out of a store that doesn’t support card payments. No matter our advancements, there is still the urge to have things quicker, sooner and faster, but even though improvements are on the horizon, it doesn’t mean we shouldn’t pause to see how far we’ve already come.
Historical perspective
The modern age has seen a steady development of payment methods even before arriving at the innovative methods of the digital age. Before the development of the bank card, people carried cash and found themselves brought up short when they ran out. This also carried a high risk of robbery, and simply losing your wallet could spell financial disaster.
Checks helped things along. By writing an official check, people were freed to make monetary transfers of larger amounts than they carried, but this method was slow and open to fraud. It was only when credit card terminals were introduced by Visa in 1979 that banking finally reached something resembling what we have in the modern day.
Rise of digital payment technologies
It took the e-commerce revolution begun by Amazon and eBay in the mid-90s to launch the rocketing development in digital payment technologies. Finally, companies specializing in payment systems turned their eyes to a great need in our technologies – speed and convenience.
Most early payment systems were done by credit or debit card payments and online banking. Transactions could still take several days to complete, as they relied on clunky online systems, but this was still a huge step up from the pre-internet days. Online banking made it more convenient for people to send money directly, eliminating the need for cheques and cash.
However, the early days of the internet were treacherous. These early methods lacked the security we enjoy in our digital age and were often subject to fraud. PayPal, at the turn of the century, was the first system to introduce the concept now known as eWallets, and acted as a proxy system to protect bank account details from online vendors, introducing a new level of security and convenience as well as paving the way for our current instant payment solutions.
Emergence of instant payment solutions
These days, we have a wealth of options at our fingertips for fast, convenient payment methods. In many areas, payments go through in a flash. Customers will do anything to make sure they can know their transactions won’t be delayed. People will find stores that accept PayPal, banks that provide rapid transactions, search for an instant withdrawal casino, and even clear their baskets at online checkouts if the payment system takes too long. Secure online banking brings unprecedented ease to managing money online and even simple credit and debit card payments are near instantaneous.
New peer-to-peer payment systems or eWallets are payment platforms that allow you to store multiple card and bank details, then use these simply at the click of the button. This provides a sometimes useful buffer between the purchase being made and the funds coming out of your account, and ensures instant transactions. eWallet providers also offer a range of other services, such as dispute resolution and easy transactions between friends and families. Examples are PayPal, Venmo and Cash App, as well as hundreds of smaller options that provide niche benefits.
Mobile payments are also a recent development spurred on by our new desire for accessibility and convenience in an ever more mobile-focused world. Apple Pay and Google Wallet facilities store card details so that people can complete transactions through a simple tap of the button on e-commerce platforms, or enable contactless spending via mobile in physical stores. NFC is the driving force behind this development.
Future trends and innovations
Today, most people rarely struggle to make a payment instantaneously. However, some developing countries still lack the same physical payment infrastructure as the US and other western countries, leaving a greater reliance on cash transactions. Further, it can be hard to get access to an international bank account, and even in Western countries, international transfers can be slow and expensive. Innovative technologies such as blockchain and cryptocurrency look to decentralize our economies and increase payment speeds by cutting out the middleman of traditional financial institutions.
