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.

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 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.