The Ongoing Evolution of Money and Payment Technology

June 13, 2016


Do you remember the days of paying for groceries with a cheque? Or perhaps you recall seeing the checkout clerk hold a hundred-dollar bill under a black light to see if it was counterfeit. Well, those days of paying for your purchase like that are long gone. As a business, this should be good news as payments today are quicker to accept and so much more secure. But how did we get here?

New technologies like Apple Pay are just the latest evolution in a long line of payment “technology” dating back to our prehistoric ancestors. So as we move into a new era of payments – one of increased mobility and convenience – we look back at the payment methods of years’ past.


Barter - Since the beginning of man


In the early days, if we wanted something that we did not own, we had to barter for it – using a good or service as the currency. This worked, but not always. For example, it was difficult to match goods that one person had for goods that another person wanted. It was also difficult to transport the barter currency depending on what it was, and without standardized “prices” each transaction had to be individually negotiated.


“Commodity” Money - 3,000 BC commodity-payments-moneris

To help solve some of the issues with a barter economy, civilizations started using commodity money whereby salt, tobacco, tea, or seeds became a standard for payment. It solved the matching problem with a strictly barter economy, but presented other problems in terms of sustainability and scale. Salt, in large quantities, is heavy, difficult to transport, and not immune to the elements.


Money is Born - ~600 BC 


The king of Lydia – in modern-day Turkey – minted the world’s first coins, made from gold imprinted with the head of a lion. This was the beginning of a new world of exchange, where a durable, easy-to-carry and standardized currency could be traded for any good or service for a specified price. This paved the way for tremendous economic growth as transactions became easier and – in a sense – mobile. At this time, the gold coins were not representative of value, but held intrinsic value themselves.

When paper money was introduced – as early as the 12th Century in China – it shifted the paradigm because the paper was simply a representation of intrinsic value. While this was initially backed by the gold coins it represented, over time it evolved to strictly being representative of real value.


Cheques - 1500s AD


The common use of cheques started in Holland during its boom as an international shipping and trading hub in the early 1500s. As wealthy traders started to accumulate large quantities of cash, they wanted a place to store it, and a way to withdraw the cash with a written note. Over time, these cheques evolved to include serial numbers to authenticate banking accounts and vast networks of clearinghouses so that banks could clear cheques with each other. While cheques are still used today, they only account for 4% of total transactions in Canada.


Credit Cards - 1950s


Credit cards were introduced in the 1950s by the ever-innovating American Express. At the time, the card had an account number which the merchant would write down, along with the amount spent, and provide it to American Express. The cardholder would then receive a bill from American Express and make payment. American Expressed began using the magnetic strip technology in the late ‘70s followed by Visa and Mastercard in the ‘80s. Credit cards as we know them remained relatively unchanged until EMV chips and contactless technology were introduced in the 1990s.


The Rise of eCommerce – 1995 


While technically payment information could be transferred from the early days of the Internet, it wasn’t until reliable encryption was available that online payments became a viable option. Netscape 1.0, which was released in 1994, included a security protocol called Secure Socket Layer (SSL) which could encrypt transactions for both buyer and seller. In 1995, Verisign introduced digital certificates to verify the identity of online merchants. It was in 1995 that began selling its first books online, and much of the rest is history. According to, in 2014 retail ecommerce sales in Canada totaled $25.37 billion and is forecast to grow at roughly 2% per year.


Mobile payments (Apple pay) - 2014


Even though Back to the Future (Part 2) predicted we’d have the ability to video chat from our phones, did you ever think customers could make payments with that same device? This step brings us closer to seamless, more convenient payments - a mobile option where payment can be made simply with the tap of a phone.  

To learn more about mobile payments and Apple Pay, visit


The information in this article is provided solely for informational purposes and is not intended to be legal, business or other professional advice or an endorsement of any of the websites or services listed.

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