From cattle to bitcoin – A short (and bizarre) history of payments

Johan Bendz, chief marketing officer at iZettle, takes a look at how we got from seas and shells to mobile payments and bitcoin.

Money makes the world go around, so the saying goes. But just as the world doesn’t stop turning, the way money travels around it doesn’t stand still either.

For thousands of years, mankind has found ever new and ever more inventive ways to pay for goods and services. From seashells to bitcoin, innovation has never ceased.

With 2015 promising another exciting year in payments, we thought it would be fun to look at the history of how people have paid for things over the ages as well as having a guess at what the future may hold.

What will you give me for that?

Before what we call ‘money’ came into being, people exchanged goods or services directly for other goods or services. A system known as ‘barter’.

Whilst animals being used for barter by ancient peoples is pretty much universal, more unusual items from history include snail shells, salt and even stones.

Items used for barter didn’t just have to be practical, they could just be something that brought pleasure to the owner.

What’s in a name?

The Romans gave us the words ‘mint’ and money’. The origins of these words can be traced back to a temple to the goddess Juno ‘Moneta’ in Rome in the third century BC.

Moneta was the personification of money and lent her name both to the making of money and money itself.

Coining it in

The earliest coins found by archaeologists date back to the Iron Age. Examples of coins from around 600-700 BC have been discovered in China and around the Mediterranean.

Almost since they were created, images and writing have been stamped upon them. The earliest coins had animals on them and the first society known to put the image of a living person on their coins were the ancient Egyptians.

The practice of putting living people on a nation’s currency varies across cultures – being seen either as a celebration of a leader or an extreme example of hubris.

In contrast to the current British monarch, Queen Elizabeth II, who appears on the coins of sixteen nations, the USA does not allow the representation of living people on its currency. This tradition (now enshrined in law) dates back to George Washington who personally refused the honour.

Medieval mobile payments

Wearable ‘tech’ isn’t just a modern phenomenon. It was common in the Middle Ages for knights to use their rings at inns to stamp a bill. As their rings would carry an engraving unique to the knight, the bills could then be taken to the knight’s castle for payment at a later day.

This method meant that knights did not have to wander around carrying bags of money and was considered a more secure way of travelling. A little like mobile payments are now for those who don’t want to carry cash around.

Checking cheques with a photo

Modern cheques (or checks if you prefer) have their origin in 16th and 17th century England. A kind of bill of exchange, they were originally handwritten before the Bank of England introduced the use of pre-printed versions.

Some claim that the first cheques can be dated as far back fourth century India. Known as an ‘adesha’, these were orders that bankers would use to authorise the payment of money to a third party

Whilst cheques are on the decline globally as electronic methods are preferred, there are still innovations in this area. In 2014 Barclays bank began to allow people to pay a cheque by simply supplying a photo of it.

Credit where credit is due

The modern credit card originated in the 1950s with the Diners Club Card. Legend has it that the source for its inspiration was the dented pride of one of its founders.

Businessman Frank McNamara was eating in a fancy New York restaurant when he realised he had forgotten his wallet. To pay the bill the embarrassed McNamara had to call upon his wife to help him out.

He vowed never to let this happen again and within a year had, with two other businessmen, launched the first credit card.

The story has another twist though. Convinced credit cards were just a fad, McNamara sold his shares a few years later to his other founders for the (relatively) paltry sum of $200,000.

Money gets digital, gets smarter

The digital age has allowed money to become easier than ever to transfer. From mobile payments on smartphones (such as those we facilitate at iZettle) to digital currencies like bitcoin, innovation in payments never stands still.

Ecommerce has been one of the biggest revolutions in payments history. But not many people realise how ‘old’ ecommerce is.

Whilst the likes of Amazon and eBay may have brought ecommerce to the masses in the 1990s, the first ever online sales took place as far back as 1971, when students from the Massachusetts Institute of Technology arranged an electronic payment with students at Stanford Artificial Intelligence Laboratory.

The item purchased? Some cannabis.

The future is physical

Just because one can never predict the future with too much accuracy, it doesn't mean we shouldn’t try. Trials are already taking place of payment methods involving everything from heartbeat recognition to facial scanning to retina identification.

Whatever system we are using to pay for our good in a couple of decades, one thing is for sure, it will be a long way from cattle, sea shells and stones.