The Evolution of Payment Systems: The Past, Present, and Future
Over the years, commerce has evolved from simple exchange of products to the intricate buying and selling that occurs online every day. E-commerce, as it’s so called, now allows people to make orders and payments from any part of the world.
But how did it all happen? How did we make the bold leap from brick-and-mortar stores and magnetic-stripe cards to I.T solutions and web-based transactions?
Some payment veterans credit the development of the Electronic Data Interchange (EDI) as the first milestone towards an e-commerce future.
Replacing traditional mailing and faxing, EDI enabled trading partners to transfer invoices, orders and other business documents using a clear and acceptable data format, the ANSI ASC X12. The years following EDI saw numerous attempts at transforming electronic transactions from B2B to B2C trading.
Despite the effort from 80s innovators, it wasn’t until the late 90s when online shopping took off. Following the development of the first security protocol – the Secure Socket Layers (SSL) – encryption in 1994, significant advancements ensued including the launch of the largest online retailer in the world, Amazon, a year later. And the biggest online search engine, Google, in 1998.
Today, the growing use of the Internet, computers and mobile devices has led to rapid e-commerce expansion. Consumers now have thousands of products in the palm of their hands, and thanks to effective payment technologies, the shopping experience is simple, convenient and exciting.
Unsurprisingly, however, the adoption of digital methods has put additional pressure on merchants to provide efficient and streamlined payment processes.
It’s often suggested that the best payment method is that which the customer interacts with as little as possible, while the magic happens behind the scenes. This is why online payment services providers like eMerchantBroker have become so popular.
In addition to quick and efficient credit card transactions, these companies ensure merchants comply with local payment regulations and security measures for the safe conversion of online purchases.
On the other hand, the extensive automation of commerce has raised concern regarding technology and its role in undermining human interaction. One on one communication between buyers and sellers is still an essential aspect of doing business. Therefore, merchants must set the right parameters for automation, which leave room for customer support and after-sale services.
Thanks to improvements in computer networks and cyber security, it’s now possible to make large financial transactions online.
That said, the world seems to be silently moving beyond e-commerce and embracing a futuristic approach, Mobile Commerce. M-commerce encompasses all business transactions that are done through mobile devices.
Then there’s Participatory commerce (P-commerce), a new concept where would-be customers participate in the design, selection, and funding of products before they hit the market. Crowdsourcing and crowdfunding are two types of P-commerce that are gaining traction around the world. These developments, coupled with broader steps in biometrics are the future of commerce.
As you can see, e-commerce is constantly changing. As the world conforms to new trends and technologies, it’s up to you, the merchant, to know what to implement in your business to stay ahead of the curve.