Payment processing as we know it today hasn't existed in this form for long. What's more, it continues to develop rapidly; hence we can expect many exciting innovations and changes ahead.
But how did the payment industry get to the point where it is now? How has it evolved from coins and banknotes to QR codes and digital wallets? Read on to gain insights into the industry's fundamental concepts, key players, and major turning points that occurred over the past four decades.
Before moving on to the payment industry evolution overview, it's essential to understand the main terms related to the topic:
Now that you're familiar with the essential terms let's dive into exploring the payment industry's evolution.
Even before January 1, 1983, the Internet's official birthday, the payment processes have been evolving at an impressive pace.
The first big step away from cash payments was taken in 1958 when the Bank of America launched BankAmericard, the first general-purpose consumer credit card. It was issued in paper form and had a $300 limit.
The first point-of-sale (POS) terminal was introduced in 1979 by Visa and became very successful. By the 1980s, electronic payment systems were already actively used in retail, inspiring new hardware solutions from companies like Hypercom, Ingenico, and Verifone.
Terminals truly switched the role of payment processors from paper voucher logistics companies to electronic communication providers. This transformation required building a vast network of data management platforms and telecommunications relays to facilitate the acceptance of payments worldwide.
The increasing adoption of the Internet in the mid-90s demanded more advanced payment terminals that would match the needs of online businesses. Such demand gave birth to payment processing companies like Authorize.net, CyberSource, and Bibit.
Amazon launching its operations in 1994, followed by eBay the following year, marked the beginning of the e-commerce era. New online stores began to appear, causing, in turn, a significant increase in the transaction volumes passing through the payment gateways.
That's when many payment processors began integrating payment gateways into their operations by merging the best-performing companies. However, gateways at the time were specializing in specific merchant segments, while the payment processors had to deal with large customer bases with continuously increasing transaction volumes.
That's why payment processors had to opt for connecting with multiple gateways to fulfill the clients' needs. All in all, the whole system could be described as an attempt to retrofit new tech solutions on top of the old ones.
By the 2000s, the majority of merchants were integrating directly with payment gateways and routing the transactions to multiple different processors.
There was other exciting news in the payment industry as well, with emerging solutions, such as:
Nowadays, merchants face a variety of payment services providers (PSPs) that enable them to accept online and offline payments and minimize fraud risks, including:
As you can see, there are many downsides when it comes to opting for separate service providers for every payment processing aspect. That's where Payneteasy comes in.
Here are just some of the perks we offer:
The list goes on!
Keep in step with the times with the most advanced and reliable payment solutions from Payneteasy. Reach out to us now to discuss the details of your project!