The concept of paying for goods and services electronically first emerged in the 1970s as credit cards slowly began displacing cash and checks as the primary non-cash currency. However, it wasn’t until the mainstream adoption of the internet in the 1990s that online payments truly started developing.
One of the earliest implementations was secure electronic transactions (SET), launched in 1997. SET aimed to securely process credit card transactions over the internet using cryptography. However, complexity issues hindered its adoption. Meanwhile, companies like PayPal entered the scene in the late 90s, allowing individuals to pay online using funds from their bank accounts. This provided an alternative to exposing credit card details directly on websites.
In the 2000s, new technologies improved the online payment experience for consumers. Features like one-click buying streamlined checkout on sites like Amazon. Newer payment methods also emerged, including Alipay in China and Skrill (formerly Moneybookers) which facilitated international money transfers. As broadband connectivity increased, more intricate shopping cart systems became viable to purchase multiple items in a single transaction.
With the rise of smartphones, mobile payments took off in the 2010s. Digital wallets from Apple and Google that could be loaded with several payment cards simplified in-app checkouts. New digital payment platforms optimized for mobile like Venmo and Cash App made it easy to pay friends. Cryptocurrencies also entered the scene, with Bitcoin payments experimentally accepted by some merchants. Contactless payments through services like PayPal became practical via near-field communication (NFC) technology.
Today, digital payment methods have proliferated, with various options existing for different use cases and regions globally. Major pillars that have emerged include digital wallets, ‘buy now pay later’ plans, and cryptocurrencies. Behind-the-scenes, advanced technologies like tokenization further strengthen security by removing the need to share sensitive financial data with merchants.
Looking ahead, payment solutions continue merging online and in-person capabilities through unified commerce. Seamless syncing of funds across devices could even lead to a future without physical wallets. While challenges around convening stakeholders and global regulations persist, ongoing innovation promises to make paying online ever more intuitive, protected and interconnected with all the other commerce experiences. Read more about Curtis Mcnulty News here.