The Evolution of Payments and How To Benefit From It

PUBLISHED ON : August 7, 2021

BY Nium Content Team

We are a long way from where we began with money, digital payments, and the general transfer of value from one person or business to another. While the financial services sector is advancing at breakneck speed, understanding its evolution helps us forecast our best possible moves.

This article travels through the progression of payments over centuries: from barter to digitally-enabled technology. We share the benefits of embracing and embedding new payment technologies within your business flow to satisfy customer needs and gain market share.

The evolution of payments 

Going back to the earliest days, humans transacted by barter: If you had cattle and wanted farming tools, you found someone who wanted cattle and had farming tools. Not very efficient, but it worked. We soon moved on to exchanging cowries – shells of certain species used as currency in several parts of the world. Then coins, and eventually paper notes. 

China used the first known paper notes around 806 AD. Their use and popularity grew, and exchange became common worldwide. By 1816, however, gold became the official standard of value. The United States enacted the Gold Standard Act in 1900, and banking guidelines allowed a fixed production of paper notes representing specific amounts of gold. 

In the 1930s, the global depression marked the beginning of the end of the gold standard. Around the same time, payments were changing in a groundbreaking way as Western Union’s electronic fund transfers (EFTs), known as “wiring,” became widely used as a convenient means of sending money without a physical exchange between the sending and receiving parties. 

By 1914, Western Union introduced charge accounts linked to physical cards to enable customers to purchase items on credit from retailers and businesses, including department stores and gas stations. These cards, called charge cards, were some of the earliest forms of electronic payment systems in the first half of the 20th century.

In the following decades, similar convenience-first money transfer technologies sprung up worldwide. Since then, there have been more changes: the emergence of online and mobile payments, digital wallets, and virtual currencies are revolutionising how we make payments today.

New payment technologies foster inclusivity, allowing developing countries to participate in the global financial system by enabling their citizens and residents to accept and make payments for services and receive funds and remittances from friends and family in other countries. Mobile money payment options, for example, do not require creating a bank account with a physical bank branch, making it possible for rural residents to participate in the global economy. 

One popular example is mPesa, a mobile money peer-to-peer money transfer service launched in Kenya in 2007. The company’s 2020 report shows 41.5 million active customers carried out over 12 billion transactions in 2019 alone, and contributes to 75% of the mobile money market share in Kenya.

It’s apparent we have come a long way since the days of barter and charge cards. But as quickly as technology is changing, modern payments are far from finished evolving. We are in a time when every business, whether consumer-facing or B2B, can compete to make their product more convenient for users and customers without a break in business flow. 

Making this possible entails developing improved payment processes that work for your customers regardless of their market location or segment (whether they are banked or unbanked).

Benefits of building innovative payments within your business

In a post-COVID world, digital payments are increasing in popularity, rewarding organisations for meeting the demands of technologically advanced customers and pushing laggards to modernise to remain competitive. 

Savvy customers increasingly expect the convenience and efficiency of payment and banking options at the point of need. Let’s explore these benefits from the merchant’s point of view:

New revenue opportunities

Incorporating improved payment methods makes it possible to unlock new revenue opportunities within your business in several ways. You can utilise customer data to provide personalised service for each customer, whether credit services, loans, savings, foreign exchange, wealth management advice, or automatic payments. 

Increase inclusion

Plugging in embedded banking solutions like Nium increases your capabilities as a business, product, marketplace, or service. These solutions allow you to implement digital payments, mobile options, or card offerings within your business to reach more customers in markets where you operate but do not have a banking license to operate. 

Simplify complexities

Many aspects of international payments and money transfer are still quite complex, requiring several banking licences, compliance, and layers of technology to enable your business to payout and send funds to your customers in different geographical regions and multiple currencies. New digital payment methods and solutions streamline these complexities and eliminate manual processes between sending and receiving parties. 

Baked-in security

Today’s payment methods and plug-and-play modules help securely store information and credentials for numerous payment options, marketplaces, and websites. By partnering with a payments services provider like Nium, your users can complete purchases quickly and conveniently with end-to-end secure technology. Nium maintains your customers’ financial information security, leaving you to focus on your business’s core offerings. 

The global payments landscape is still evolving and moving towards intuitive convenience for customers. Building improved payments systems within your business positions your organisation to capture a bigger market share and win the hearts of customers. 

Are you ready to implement new payment solutions with smart, innovative payment technology built to enhance your business flow? Visit to get started.