From Barter System to Mobile Wallet – A tale of Payment System Revolution

Since ages mankind has believed in sharing of ideas, information and goods. This has helped knowledge and resources to reach different races and generation. This sharing led to the evolution of a system that can be beneficial for both the parties evolved in the process. We call it the payment system where the acquirer pays some negotiable instruments to the seller. What makes it a system is that it involves some substitute in return to the good being sold example cash, draft etc.

Traditional payment system dates back to the time of Egyptian and Mesopotamian dynasties where people used “Barter System” in which the fishermen, potters and other small sellers used to exchange their good in return of food grains and other materials . It was an exchange system where one good was exchanged in return for other good and the people were generally of the same community.

The trading system then expanded its boundaries to bigger dimensions where people from different regions can trade with each other. This led to the development of another payment mode where people started exchanging precious metals like copper, bronze, gold etc. Use of these metals was in the field of crafting, medicine, jewelry etc. This mode remained a standard system which later evolved into a coin based system where different dynasties and kingdoms started using gold and silver coins as their own standard way of payment system. This helped people to realize the difference between rich and poor as well.

With the advent of the industrial revolution in the 18th century, the Britishers started building a standard Banking system under the leadership of the Queen’s rule. This banking system was then adopted as the standard payment and monetary regulating body around the world. This led to the development of other modes like loans, savings accounts, withdrawals etc.

After the success of this banking system and the development of internet the focus now shifted to developing online mode of payment thus increasing the simplicity of the way customers pay to its vendors. This led to the building up of various “Electronic payment systems” like credit cards, debit cards, e-wallets, e-cheques etc. The combination of internet with the banking system brought a major revolution in the payment system as the users had the flexibility to make payments anywhere around the world in minutes.

The current scenario is now witnessing a new payment methodology called the Mobile wallet which has it’s base in another revolution called Mobile or Wireless technology. In this payment system users can pay for their goods by just simply tapping their mobile phones. This removes the complexities that are involved in establishing the payment gateways that are there in the current online system.

The mobile wallet will help the users to store their credit card, debit card, bank information on their phones and they can make payments by simply tapping their phones. With the increase in the popularity of smart phones, this new payment system is likely going to be very popular. The major technological changes have come in the present decade and have made things more easy to use. Traditional coins and notes based system may become history in the coming future. With such rapid advancements what do you think will be the next tale in this story after Mobile Wallet?

Abhinav Singh

The author is an Engineering Graduate from Varanasi, Uttar Pradesh and currently a Software Engineer at Tata Cunsultancy Services. He has a keen interest in Technology, Hacking and Network Security. He also actively writes for several national magazines of India.