Brief history of mobile payments

Throughout history, human beings have relied on some sort of payment system to purchase the goods or services we wanted or needed. Starting with the bartering system, humans began to use livestock, grain, shells, metal coins, pieces of white deerskin, the wampum, gold, the gold-backed dollar, charge cards, credit cards, the U.S. dollar and, most recently, electronic payments.

If there has been one consistent theme regarding the evolution of payments, it’s that we prefer payments that are convenient and transactional. These preferences began to take shape in the early 20th century with the introduction of the charge card.

Despite being first mentioned by Edward Bellamy in 1887’s “Looking Backward,” the first charge card didn’t’ appear until 1921 when a charge card was issued to Western Union customers. Soon after, department stores, service stations and hotels also began offering charge cards to customers so they didn’t have to travel to their hometown bank.

After the introduction of the Diners Club card in 1950, the credit card industry began to resemble what we’re familiar with today. The BankAmericard, founded in 1958, was the first modern-day credit card issued by a third-party bank. The card became Visa in 1977. Since then, technology has given us the videotex systems of the late-1970s/mid-1980s; online banking and bill pay in 1994; the mobile web payment (WAP) in 1997; and the current wave of mobile payments apps.

With that in mind, here’s a timeline of how electronic payments have advanced into the 21st century:

1983: David Chaum, an American cryptographer, starts work on creating digital cash by inventing “the blinding formula, which is an extension of the RSA algorithm still used in the web’s encryption.” This is the beginning of cryptocurrencies.
1994: Although this is disputed, some believe that the first online purchase, a pepperoni and mushroom pizza from Pizza Hut, occurs in this year.
1998: PayPal is founded.
1999: Thanks to Ericsson and Telnor Mobil, mobile phones could be used to purchase movie tickets.
2003: 95 million cell phone users worldwide made a purchase via their mobile device.
2007: Both the iPhone and the Droid operating system are released.
2008: Bitcoin is invented.
2011: Google Wallet is released.
2014: Apple Pay is launched, followed a year later by Android and Samsung Pay.
2020: 90 percent of smartphone users will have made a mobile payment. It’s estimated that by 2017, there will be $60 billion in mobile payment sales.


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