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A Brief History of Electronic Payments

It’s hard to believe that just a few decades ago, electronic payments were not even a thing. If you wanted to pay for something, you had to use cash or a check. But in the past few years, electronic payments have taken over and are now the preferred way to pay for things. Why has this happened? And what are the turning points in the history of electronic payments? In this blog post, we will explore these questions and more!

How it all began

It’s difficult to imagine a world without electronic payments. We use them to pay for everything from our morning coffee to our monthly rent. But it wasn’t always this way. In fact, the history of electronic payments is relatively short and until a few years ago people didn’t know about PayPal, Perfect Money, and other convenient payment systems. 

It all started in the early 1960s with the development of Electronic Data Interchange (EDI). This system allowed businesses to exchange financial information electronically, which laid the groundwork for modern electronic payments. Then, in 1974, the first automated teller machine (ATM) was installed in America. This gave people the ability to access their bank accounts and make withdrawals without having to visit a physical branch. 

In the 1980s, credit cards began to gain popularity as a payment method. This was followed by the development of debit cards in the 1990s, which allowed customers to directly withdraw money from their bank accounts. Since then, electronic payments have continued to evolve and become an essential part of our everyday lives.

From ARPANET to the Internet

The origins of electronic payments can be traced back to the early days of the internet. In the 1970s, the US military developed a computer network called ARPANET, which was designed to allow communications between military computers in the event of a nuclear war. A few years later, ARPANET was opened up to civilian use, and it soon became the precursor to the modern internet. One of the first applications developed for ARPANET was electronic mail or email. This eventually led to the development of other types of electronic payments, such as online banking and shopping.

The World Wide Web era

As the internet expanded in the 1990s, new technologies were developed that made electronic payments even easier. One of the most important inventions was the World Wide Web, or simply “the web.” This technology allowed users to view websites and interact with other people online. At the same time, encryption technology became more advanced, making it much more difficult for hackers to steal sensitive information. 

These two developments allowed online retailers to flourish, and electronic payments quickly became the preferred way of paying for things. Today, nearly all businesses accept electronic payments in some form, including mobile wallets and cryptocurrencies like Bitcoin. Despite the continued growth of these new payment methods, credit cards remain one of the most popular ways to pay for things online and in-store.

Marketplaces and e-commerce explosive growth

The past decade has seen explosive growth in marketplaces and e-commerce, with Amazon leading the way. In 2018, Amazon had more than $230 billion in annual sales and over 300 million active customers worldwide. Other large online retailers, such as Alibaba and eBay, have also experienced significant growth in recent years.

As a result of this rapid growth in e-commerce, electronic payments have become even more prominent. Thanks to services like PayPal and Apple Pay, we no longer need to carry cash or credit cards to make a purchase. And with new technologies like blockchain being developed every day, the future of electronic payments looks very bright indeed!

Electronic payment security on the rise

Despite the popularity of electronic payments, many people are concerned about the security risks involved. After all, there have been numerous data breaches in recent years that have exposed countless credit card numbers and other sensitive information to hackers. 

Fortunately, new technologies are constantly being developed to address these concerns. For example, blockchain-based cryptocurrencies like Bitcoin offer a degree of anonymity that is not possible with traditional payment methods. And companies like Apple Pay use state-of-the-art encryption technology to keep your financial data safe from prying eyes.

Electronic payments abundance

Despite the current and unchallenged (for the time being) position of global digital payment systems like Visa, Mastercard, Digital Wallets, or PayPal, it is important not to overlook the fact that the payment system is constantly evolving.

Locally developed, precisely specific, and custom-designed payment options keep popping up. It’s also increasingly difficult to identify these in online shopping because you can use ApplePay, Google Pay, or other mobile payment applications equally well while shopping online or at local grocery stores.

Phone-based customer payments are now a common part of everyday shopping, even in the smallest towns.

An interesting fact is that you don’t have to carry your mobile in your pocket to make electronic payment options thanks to technology like the Internet of things.

Running using their watch or buying food with their band is not unusual these days.

What was thought to be a type of phantasmagory years ago hasn’t raised an eyebrow anymore.

In-app purchases

The rising popularity of social media and online gaming was the basis of the in-app purchase. Developers quickly recognized how they were in the middle of a huge opportunity. purchasing in-app options could be a source of revenue.

The majority of users don’t need money to purchase the app or app, however, they are required to pay to upgrade the capabilities or features. This is what they do.

One of the more played games for mobile, Clash of Clans, the cost of a single gem costs $4.99. Candy Crush, Minecraft, or Two Dots are other examples of in-app deals that are perfectly balanced and are frequently used by their customers.

In Game of War, you have to pay around $99.99 to purchase a package of gold worth 28K! Tinder and other apps that offer premium content also have a value more than the average.

It’s still not an obstacle for a lot of users.


In conclusion, the history of electronic payments is relatively short but has seen rapid growth in recent decades due to the proliferation of marketplaces and e-commerce sites like Amazon and Alibaba. Despite some security concerns, many forward-looking companies are developing cutting-edge technologies to ensure the continued growth and success of electronic payments in the years to come.

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