Money has been around for at least 3,000 years but before that it’s assumed that a system of bartering was used – ‘help me kill a mammoth and I’ll help you build that monument’ – that kind of thing. The first official currency came about in around 600BC with coins made from electrum and stamped with pictures of animals which denoted their value – a lion presumably being worth more than a mouse. Paper money followed and before long it was cheques (remember those?!).
But it’s perhaps plastic that’s had the most significant impact on the way we pay for things in the last century. Although the credit card as we know it now didn’t come about until the 60s, the first mention of a card that you could use to pay for things was actually in 1887, when the US author Edward Bellamy wrote about the concept in his utopian science fiction novel Looking Backward. Little did he know that a century and a half later, credit cards are as ubiquitous as cars, and over half of UK spending is on plastic.
The 60s pioneers plastic
It was 1963 that saw the launch of American Express in the UK, and three years later, Barclaycard issued the first credit card. But cash was still king, and access to it made easier when, in 1967, the world’s first cash machine was installed in Enfield, Middlesex – and with it, the birth of the 4 digit pin number (just don’t write it down).
The 70s sees us swiping
Anyone remember, Access, ‘your flexible friend’? The little animated plastic credit card and his friend Money the pound sign? That was a joint venture between Natwest, Midland, and RBS launched in 1972, and was actually the precursor to Mastercard.
If you’re old enough, you’ll also remember the bulky, plastic ‘click and clack’ imprint machines used to capture the card details when a customer paid. ‘Click’ the credit card into place face up, add the triple-ply duplicate paper, hold the imprinter firmly with one hand, slide the handle over the card with the other – and clack! – the credit card details are captured and all the customer had to do was sign the paper. The papers were collected at the end of the week, sent off to the bank and the money debited from your account, some, oh, three weeks later.
Luckily for any cack-handed checkout operators not able to master the action, Visa introduced the ‘swiper’ in 1979, the first automated credit card machine. A quick swipe and the card details were read, with not a crumpled sheet of triple ply paper in sight.
The 80s go electric
Early EPOS systems were introduced in the 80s meaning retailers could control payments and stock at the same time. And the first online shop of sorts was completed by a Mrs Jane Snowball when she used a television and a controller to purchase groceries.
This is also the decade that launched the debit card, most notably the Switch card – a joint venture between RBS, Midland and Natwest, followed by the ‘junior’ version, Solo. Security also ramped up with the introduction of hard-to-replicate holograms on cards to avoid forgery – the dove on the Visa card being the most ubiquitous, designed by Kurt Roald using over 100 photographs of a dove in flight.
The 90s takes to tech
In 1990, the French launched chip and pin, (although it was a whole decade later that it made it to the UK – what took us so long?) and ‘do you do cash back?’ entered the vernacular as consumers were allowed to withdraw cash with their debit card when they paid for goods in shops.
1997 saw the first internet banking service, from The Nationwide Building Society, and a can of Coca-Cola was bought from a vending machine using a text message. The 90s also saw two big births – Paypal and the Euro. Allowing only virtual transactions initially, the latter didn’t come into physical circulation as notes and coins until 2002. Shall we, or shan’t we join the Euro? Maybe we should have a referendum…
The 00s goes contactless
By 2001, more than half of UK retail spending was on plastic and just three years later card use exceeded cash for the first time. But in 2007, plastic’s writing was on the wall, albeit faintly, when the first contactless payment was taken and a mobile phone with built-in contactless payment technology was piloted for travel in London.
The 10s ramps it up
2012 was the year contactless really came of age, when Visa sponsored the London 2012 Olympics and Paralympics and contactless payments were introduced on London buses.
Apply Pay launched in the UK in 2014 and Starbucks became one of the first retailers to accept mobile payments in order to reach customers who don’t carry cash. By 2019, contactless payments were up 31% on the previous year and the number of payments made online or by mobile grew from 1.6 billion to 2 billion.
2020 - dirty money?
So it’s 2020 – Corona has hit, and no-one wants to handle cash anymore. To help reduce the risk of spreading Covid, the spending limit of contactless went up to £45 in April of this year. And it seems to be working. In that month alone, Barclaycard announced it had processed over 7 million contactless payments over the previous limit of £30, with 43% of in-store transactions being made with contactless.
So where will it all go next?
The beauty of technology is it never stops moving, and the immediate future of payments is perhaps predicable based on what we already know.… biometrics will be king. Offering convenience, speed and security, biometrics are unique to each person, making them by far, the safest way to pay for goods. Voice command, iris scanning, fingerprint scanning, palm scanning and selfie payment are all coming our way. And in Sweden, ‘biohacking’ is already live, with around 2000 people going about their business with a biometric chip fitted under their skin allowing them to pay for things. Want to go further? Your wish may well be about to come true. Vascular biometric technology which captures vein patterns and heartbeat analysis are all in the lab. What’s the guessing Edward Bellamy predictable that ‘eh?!