History of Money and Payments

People have engaged in commerce to exchange goods and services for payment throughout the ages. These financial transactions did not always involve monetary payments. There was a time when standard money did not even exist and people utilised other forms of payment to perform transactions. With the evolution of technology, money and payments have changed drastically.

Current credit card processing technology and advanced business solutions make financial transactions possible at almost any time and virtually any place.

• The History of Money Explained: Explore this infographic that provides a comprehensive timeline of the evolution of money.
• Economics A-Z Money has a broad definition that includes a variety of forms of value.
• Types of Finance: Bartering: Bartering involves trading one person’s goods or services for another person’s goods or services.

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Bartering and Livestock

Bartering was an advantageous way to exchange goods and services for people many years ago because it enabled both parties to get what they needed. For example, two parties might exchange tools for services to fulfill the needs of both people. Livestock was also considered wealth that people could amass. The more cows or sheep someone owned, the wealthier they were.

Precious Metal Coins

Ancient civilisations used to use beads and shells as coins. Eventually, they began using precious metals to make coins. People in the ancient civilisation of Lydia were among the first to use coins made of gold and silver. This currency was both valuable and easily portable.

• Illustrated Ancient Coin Glossary: Explore the history of precious metal coins by reviewing terms included in this glossary.
• Ancient Coinage: What Ancient Coins Reveal for Modern Art Historians (PDF): Ancient coins were considered works of art created by artisans.
• A Brief History of Coinage in Britain:

Leather Money

Leather was another material used for currency. People in ancient China used white deer skin for banknotes. The notes were large compared to the bills used in today’s society. Leather money could have been as large as one-foot squares of deerskin.

• Three Early Discoveries of Leather Money (PDF): Ancient leather coins have been discovered that were used as currency in some civilisations.
• The Chinese Monetary System: From Ancient Times to the Early Modern Period (PDF): Leather currency dates back to ancient Chinese civilizations.
• The History of Money and Usage: White deer skin was used as money in China.

Paper Money

Eventually, the Chinese developed paper money. Civilisations struggled with determining and maintaining the value of paper money. In addition, challenges came in the forms of both inflation and the production of the currency. Paper money went in and out of use during periods of ancient history.

• A Quick History of Paper Money (PDF): Explore the chronology of paper money throughout history.
• The Timeline: British Currency: The evolution of currency in Great Britain.
• Banknotes: a Short History: A whistle-stop tour through the history of notes.

Gold

England established gold as its standard of value in 1816. Following this event, Europe began backing bank notes with the gold standard. This meant the value of any currency was set by establishing its value in gold. The United States followed suit in 1900. Before this time, both gold and silver were used for dollars.

• Gold as Money: Gold coins date back to approximately 550 B.C.
• The History of Gold (PDF): Gold began as a feature of decorative objects and jewelry in ancient civilisations.
• Gold’s History as a Currency Standard: This timeline looks at the use of gold as currency from the present day back to ancient times.

Pound Sterling

The British pound may be the oldest ‘living’ currency in the world. However, its origins can be traced back to continental Europe. Its name derives from the Latin word ‘poundus’, meaning ‘weight’.

• A Short History of the Pound: From continental roots to uncertainty in Scotland.
• A Short History of the British Pound: This timeline focuses on the most important years of the pound.
• What is the Pound Sterling (GBP): The history and current status of the pound.

Credit Cards

Consumers began enjoying credit from retailers during the 20th century. Some retailers, such as department stores and gas stations, began creating individual credit cards to issue to consumers. These cards were created to make spending money more convenient for people. Diners Club was the first actual credit card, which gave consumers the ability to purchase meals from several restaurants located in New York City.

• Credit Cards Explained – Understanding the Basics: This payment method has revolutionised the way people pay for goods and services.
• The History of Credit Cards: How it All Began: A guide to credit cards in the UK.
• When Were Credit Cards Invented? (PDF): Merchants had been extending credit to consumers long before credit cards made their debut.

Decimalisation

The United Kingdom’s currency was decimalised in 1971. Guineas, half crowns, threepenny bits, sixpences and florins were all abandoned. To help aid confused consumers, a public information campaign was set up before D-Day on February 15th.

• The History of Decimalisation in the UK: An explanation of events and a look at how the process had been considered before 1971.
• Decimalisation v Metrification: The two arguments weighed up.
• Decimal Day: When Britain Said Farewell to the Shilling: D-Day remembered.

Online Shopping

With the rise of the Internet during the 1990s, online shopping arrived on the scene. Consumers embraced the ability to peruse the Internet and make purchases. Common historical data suggests that Pizza Hut may have been one of the first retailers to execute an eCommerce transaction. The company began allowing people to order pizza on its website as early as 1994.

• UK e-Commerce Timeline: This timeline shows information about the evolution of shopping through current eCommerce activity.
• Internet, email and Mobile Phone Fraud: How to stay safe when online.
• Online Social Networks and eCommerce (PDF): Online merchants want to gather information about consumers while they shop, which assists with marketing research.

Mobile Payments

Coca-Cola receives credit for offering the first mobile payment transaction in 1997. The beverage retailer created special vending machines that enabled consumers to pay for their drinks by sending text messages from mobile devices. Since this time, mobile payments have skyrocketed in popularity. Now, more people than ever before are paying on the go, and more merchants can accept payments anywhere, without being tied down to a cash register.

• [What are Mobile Payments?(https://squareup.com/gb/en/the-bottom-line/selling-anywhere/mobile-payments): FInd out more about mobile payments and how to use them.
• Mobile Commerce in the United Kingdom (UK) – Statistics and Facts: Statistics in recent years regarding UK shopping via mobile phones.
• Mobile Payment Apps: Everything You Need to Know: A guide to making contactless payments with smartphones.