Exploring the Evolution of Payment Solutions
When we hover our phone or smartwatch over a payment system at our local grocery store, vending machine, parking terminal, or other retail location, we rarely stop and think about the technological advancements that have taken place to get us to this point. While we may not think about it often, there are many factors that have played into the evolution of payment solutions – including enhancements in technology, increased customer expectations, and trial and error throughout the years.
It is common knowledge that payments are a crucial step in the interaction between a customer and the company they are doing business with. Payment marks a successful customer exchange, so it is important for companies to leverage the best payment solutions on the market and tailor their payment processes to their customers’ preferences.
To give you a better understanding of the evolution of payment solutions and how we got to where we are today, join us as we take a walk down memory lane.
History of Payment Solutions
Over the years, we have used quite the variety of payment solutions, and it is remarkable to look back on the past to see how far we have come. Even before the use of technology for completing transactions, people around the world have used insightful systems to track and organize payments.
Before 3000 B.C. – The earliest form of payment was known as bartering. People would simply trade items that held significant value to the other person including grains, livestock, animal hide and more. One example of this is in ancient China, where shells were used as currency.
3000 B.C. – Barley was the first official currency in the world. Unlike bartering, where an item could be one man’s trash and another man’s treasure, barley was considered valuable across the board. According to Agriplastics Community, the most common measure to control the exchange of barley was the Sila, which would amount to approximately one liter.
600 B.C. – The first coins appeared all the way back in 600 B.C. in what is now western Turkey. Because the coins were often made of precious metals, they had to be weighed to determine value. For time saving purposes, leather money was created out of deer and other animal skin.
500 B.C. – Roughly 100 years later, the Chinese invented paper which they started using as an alternative to coins and leather. Countries around the world were quick to adopt the use of paper currency, as it could be easily mass produced and was more convenient to carry around than heavy coins and large pieces of leather. Paper currency was the primary form of payment for hundreds of years.
18th Century – In the 1800s, England and the United States both established gold as their standard of value which meant that the value of any form of currency was decided by first determining its value in gold. As time went on, people found it increasingly frustrating to carry around large sums of money. This led to the invention of paper checks and by the mid-1800s, they were the primary means of conducting large transactions.
20th Century – While there were many payment methods throughout history, nothing compares to the success of the plastic payment card. The first bank-issued plastic card was created in 1946 by John Biggins and it set the tone for the many decades to follow.
Modern Day Payment Solutions
As you can see, payment solutions have come a long way. As customer preferences are continuing to shift toward contactless payments, mobile wallets and the use of RFID technology within watches and other devices is becoming increasingly popular. And, the growth of the ecommerce industry has required companies to search for reliable and secure payment methods for their customers paying online.
Credit and Debit Cards
Today, credit and debit cards are the payment method of choice for most people. Over the years, card payments have evolved to include magnetic stripes, chips and Near-Field Communication (NFC), which enables contactless payments.
Mobile
In 1997, the first mobile payment transaction was conducted by Coca-Cola. They used special vending machines where customers could pay by sending text messages from their mobile devices. Today, mobile payments are a very popular and viable form of payment across the world. Many devices nowadays have a “mobile wallet” feature that allows customers to quickly and easily make purchases in-stores and online, withdraw cash from ATMs, and transfer money from person to person.
Contactless
As we continue to navigate the unprecedented times of COVID-19, many people are looking for ways to limit their interactions with both people and objects. One way they’re doing so is by using contactless payment systems which work by utilizing Near-Field Communication (NFC), a short-range wireless technology that allows for the contactless exchange of data over short distances.
While contactless payments were around before the onset of the COVID-19 pandemic, people have been much more receptive to adopting them into their everyday routine in their efforts to avoid contracting the virus. Even in a post-COVID world, it is predicted that contactless payments will continue to rise. In fact, MasterCard polled 17,000 consumers in 19 countries and found that they perceive contactless payments as “the cleaner way to pay.”
Unattended
As technology continues to evolve, unattended payment solutions continue to rise. Today, unattended payment solutions are becoming the new norm and you do not have to look very far to find one. Parking, ticketing, and retail kiosks, as well as restaurant drive-thrus, vending machines, and pharmacy dispensers are all examples of unattended payment solutions. Although they lack human interaction, unattended payments are often quick, secure, and provide an overall convenient experience for customers.
Biometrics
If you’re unfamiliar with biometric payments, they are carried out by using your fingerprint or other body recognition to complete a payment. An example of this would be the use of face recognition on your smartphone to unlock it. The same technology is used today to make payments. According to Frost & Sullivan analyst Ram Ravi, palm reading, iris- and facial-identification biometrics are all experiencing rapid market expansion and are predicted to grow in popularity over the next several years.
Payment Solutions of the Future
While you can’t accurately foresee the future 100% of the time, there are things you can do to give you a better idea of where payment solutions are headed. Paying attention and analyzing your customers’ buying habits will give you insight into who they are, what they buy, how they make their purchases and what payment methods they prefer. You should treat this information like gold, as it will allow you to determine shopping patterns and payment trends in the years ahead.
As mentioned previously, enhancements in technology and the creation of new payment methods will play a major role in the future of payment solutions. In fact, today’s most popular payment solutions may disappear altogether as new advancements are made. Based on current trends, contactless card payments, mobile wallets, and voice-based purchasing solutions are predicted to rise in the future.
ID TECH: Building Payment Solutions for the Future
ID TECH is focused on building payment solutions for the future. We strive to provide high-quality products for a variety of industries and do so through our strong commitment to innovation. At ID TECH, we understand the unique demands of each industry and design solutions to fit those needs, including the following:
ATM – Our products provide secure, rugged, and future-proofed hardware to ensure quality outcomes time and time again.
Loyalty and Access Control – Through our new tap-and-go technology, it is easier than ever for your customers to redeem rewards, access concerts or sporting events, provide authentication, and more.
Parking – ID TECH is a leader in the parking industry due to its focus on keeping your parking technology safe, efficient, weather resistant, and easy to maintain.
Transit – Our payment solutions for the transit industries are durable, reliable, fast, and easy to operate. Our rugged, sleek payment solutions create an enjoyable and simple user experience.
Vending – Our fast and easy-to-use technology allows customers to grab their desired item and go. Our products are designed to provide user-friendly interactions while utilizing the latest in payment technology.
See the Future of Payment Technologies at NRF
Many of the payment industry’s future facing technologies will be on display at the upcoming tradeshow, NRF 2021: Retail’s Big Show – Chapter One, including some exciting new technologies that ID TECH will be highlighting. Stop by the ID TECH booth to speak with our experienced sales team about the future of payment technologies!
About ID TECH
ID TECH has established a solid reputation in the industry as a leading payment peripheral provider with magnetic stripe, EMV contact, and EMV contactless expertise. We are also an OEM payment solution provider with the capability and willingness to customize solutions to fit our customers’ needs. With a strong foundation and continued success rooted in card readers, ID TECH is currently expanding its reach in the ever-evolving payments industry.
To learn more about ID TECH, please visit our about page.