In the business world, payment implies a successful conversion and transaction. Thus, collecting payment is as important as making a sale. Not just does payment mark a conclusion of a trade cycle, it sustains the business operations. As technology progresses, consumers’ behaviors, competition, and regulations have continuously evolved. These dramatic shifts affect how people think about money, payment, purchasing, and banking. In response, payment processing evolution has taken place.
So, what does payment processing evolution mean? How can these drastic changes affect businesses? Perhaps, as an entrepreneur, you might ask these questions and more. And it is a good sign! Displaying interest in knowing the answers and adopting these drastic changes will improve your business cash flow, and later on, lead you to success.
Payment System Timeline
Undeniably, types of payment systems have evolved over the centuries. From payments made with literal gold coins to virtual payments using digital wallets. All these changes addressed the constant and varying needs of each consumer. The payment industry has turned into a complicated space nowadays. Hence, to help you understand more about the evolution that has been happening in the payment industry, let us first look back on how the payment landscape started.
From the very beginning to 3000 B.C.: Payment system is in its basic form, called the barter system. People trade goods for goods and each good had a pre-decided value.
3000 B.C.: Barley was used as money. The payment system during this era works with commodity money instead of simple barter.
Around 700 B.C.: Payment is now distinct coins that hold value. The first coins were minted in 7 B.C. in India, China, Anatolia, and Greece, and became popular as the first legal tender ever recorded.
17th Century: Heavy coins were introduced, which later on upgraded to banknotes. This is the period when the paper money, which is largely used all over the globe, was made.
1659: Drawn notes, known today as cheques, were introduced by bankers of London as a payment instrument. These were all handwritten documents bearing the sign and seal of the issuing bank.
1979: Visa introduced and made the credit card terminal popular.
20th Century: Digital payment became known due to the onset of the Internet age. The age when paying money without cash or checks became possible.
21st Century, the Present Day: The rise of the digital payments at ultrafast speed. Aside from payments through cash, cheques, and credit cards, several new payments landscapes were introduced, including mobile, online direct debit, escrow, one-click, e-wallets, and cryptocurrencies, among others.
Payment Processing Evolution Overview
Payments are pivotal for businesses of every size. With the current advances in commerce and enterprise retail, payment processing methods are also changing fast. Businesses are consistently focused on satisfying the individual needs of consumers today wherever and whenever they arise. That makes keeping up with payment processing trends a complex, endless challenge to every business.
Given this scenario, the payment industry explained that payment processing is a segment that evolved over the years. This explains why around the world, banks, consumers, and businesses are making a shift in powerful technologies that accept payments in a convenient, reliable, and secure manner.
The Future of Payments
So, where is this headed? Trends speak for themselves. Experts forecasted that we are heading toward a cashless society. They see mobile phones as the payment hub of the future, reducing the need for carrying a separate card or cash. In fact, they projected countries such as Sweden and Denmark to go cashless in a few years. Likewise, mobile retail payments to rise to $410 billion by 2020.
Why Understanding Payments A Good Business Move?
Payments are often the neglected aspect of the trade process in any business. Even though payments are the customer touchpoint, most of the businesses just overlook how the customer wants to pay. To stay on top of the game, know that the non-availability of your customers’ favored payment method could break their trust and eventually push them to your competitors.
The most noteworthy feature in the evolution of payments is that it has always moved toward a more convenient and secure option that benefits both your business and customers. You know how payment systems have changed with time and thus it will only make sense to keep up with it. Do you want to know more about the latest technology that can help you improve your payment processing system? Contact us now!