5 Turning Points in the History of E-Payment
Have you
ever imagined how the world would look like if we had to pay for goods with a
grain or the animals we’ve just hunted? For thousands of years, it was the
reality we had to cope with. Luckily, these days are over and electronic
payment methods (e-payments) are now available for everybody and are an
important part of our day to day activities and life. Nowadays paying for goods
and services is really convenient – it can be as easy as a one-time click.
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It’s obvious that the development of e-payments is
closely related to online commerce and follows the improvements in that field.
As you probably know and experienced, e-commerce is extremely convenient
and online payments are way more suited to
customer’s requirements than traditional payment forms, like cash. There are a
variety of payment methods today, such as online banking, credit, and debit
card, charge card or e-wallet, but take a step back and look at how it all
began.
1. It all
started with the World Wide Web
The
origin of e-payment is, of course, related to the beginning of the internet,
which revolutionized the world like nothing before. After all, if there were no
World Wide Web, there wouldn’t be online stores and e-services. was intended to be a communication network in the
Vietnam War era. But the main turning point happened in 1989 when Tim Berners -Lee presented the solution of
making information easier to publish and access on the internet by using the
so-called “sites” or “pages”.
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2. The
beginning of e-payment systems
Along with internet development, pioneer online
payment services started to operate in the first half of the 90s. In 1994 Stanford Federal Credit Union was
established – the first financial institution which
offered online internet banking services to all of its members. However, the first
online payment systems weren’t user-friendly at all and required specialized
knowledge of encryption or data transfer protocol. What is more, the systems
weren’t adapted to the constant changing of users’ number and their transactions.
In the beginning, the main players on the e-payment market were Millicent (founded in 1995), ECash or CyberCoin (both in 1996).
The majority of the first online services were using micropayment systems and their common attribute was the attempt to implement the electronic cash alternatives (such as e-money, digital cash or tokens). Moreover, in 1994, Amazon is founded (one of the e-commerce pioneers) and Pizza Hut starts accepting online food ordering. Can you believe it? The first online delivery system was one step ahead of all Pizza Hut’s competitors.
3. Evolution
of payment possibilities
Most of the modern payment systems are easy to use
with the payment process minimized to just a few simple steps. They
are website or app-based, which means there is no need to install a distinct software or buy special equipment, which was the case
a few years ago. Nowadays systems are available from any device connected to
the internet.
Every year there are new solutions in the
e-payments world that stimulate e-commerce. New
players make electronic payments both easy to implement and convenient for
users who pay online. So what’s next?
4. Time for game changers
Online and offline payments are
interpenetrating and the distinction between these two becomes more and more
blurred each year. It is related mainly to the dynamic growth of
technologically advanced mobile devices with
the internet connection and retailers who allow you to pay in their brick-and-mortar stores with your smartphone are
nothing exceptional nowadays.
A growing number of online buyers is noticeable, so we’re sure enough that smart
technologies will be becoming more popular than conventional banking.
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5. Social
networks and new technologies
It is also of the consistent popularity
of social networks and online gaming. Facebook only (which was launched
in 2004) has 1,55 billion monthly active users and is still growing. Till
today, the network extends its functionality with online games, which allows us to make in-game purchases.
Furthermore,
mobile technologies are developing fast and customers no longer need PCs or
laptops to buy online. The future of e-payment depends on the development of
new technologies and the role of the internet in our life. As you see, the payments landscape is changing fast
and it’s driven by new technologies. It’s obvious that the future of online
payments depends on the development of internet infrastructure. Users are more willing to pay for intangible goods (such
as online games or multimedia access) and customers will make more payment
choices.
Will smart technologies disrupt traditional bank's industry? Only time will tell.
Will smart technologies disrupt traditional bank's industry? Only time will tell.
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