by Tricia Lee
Digital payments have experienced a meteoric rise since their era started. They were not popular when they came into existence in the early 1990s, but it is impossible to imagine a world without digital payments now. As the use of cash and other traditional payment options declines, digital payments are becoming stronger, offering the efficiency, convenience, speed, and safety that do not exist with traditional payment options. The history of digital payments is brief, although that doesn't mean it is not exciting.
The introduction of the internet provided us with possibilities that we could only dream of before its inception. Although the framework and technical foundation for the internet was laid in 1966 with the launch of ARPANET, it was not until the 1980s that we started taking advantage of what it was capable of. The development of a system of pages and websites that could be connected using hyperlinks in 1989 was the flashpoint that began the internet revolution, including the advent of digital payments.
Stamford Federal Credit is widely thought to be the father of digital payments as it was the first organisation to make an online payment system available to its clients. This was in 1994. Once the first ever online payment - payment for a pizza from Pizza Hut reportedly - was completed, other organisations followed, providing customers with the ability to use digital payments.
Elon Musk, Ken Howery, and other investors founded PayPal in 1998. PayPal specialises in online payments, and it is thought to be the reason for the acceleration of the development and acceptance of digital payments and the systems they rely on.
PayPal became popular with eBay users who used it to buy auction items on the site. While PayPal was coming up with innovative solutions like allowing mobile and email address payments, eBay was working on a rival payment system. Billpoint by eBay could not rival PayPal, with the latter’s popularity among eBay users soaring. eBay eventually bought PayPal in 2002.
Digital payments would continue to improve as the underlying and tangential technologies evolved. For example, the growth of mobile banking, improvements in smartphone technology and improvements in banking systems have led to an increase in the use of digital payments globally.
These advancements have also made online and mobile money transfer services available and accessible to many people. For example, the Ria international money transfer service is available online and as an installable app. Anyone with internet access can send money across borders conveniently and easily using this and other online money transfer services.
Mobile wallets have become very popular these days, but they are not new. Coca-Cola already provided a mobile wallet to its customers as far back as 1997. This option allows customers to purchase soft drinks from vending machines and pay via text on their phones.
Mobile wallets like PayPal, Skrill and Neteller continue to offer digital wallets and payment options to millions of people around the world.
While brief when put into context, the history of digital payments is an interesting one especially when you consider how far they have come so quickly. These payment options are evolving and are predicted to replace cash and options like cheques, so their history continues to be written.
Tricia Lee is a contributing writer at Sparkwebs, a Digital Marketing Agency. When she’s not writing, she loves to travel, dance, and read non-fiction.