I thought some history of credit card processing would be a good base to build this post upon.
Going back as far as 9000 BC one could use cattle, camels and fish as currency.
You had to spend the fish fast.
Cowrie shells, gold and silver nuggets leading to Chinese deerskin notes and Native American wampum beads.
The Manhatten Wampum bead myth
“In the Dutch National Archives is the only known primary reference to the Manhattan sale: a letter written by Dutch merchant Pieter Schage on November 5, 1626, to directors of the West India Company, which was instrumental in the exploration and settlement of “New Netherland.” In the letter, he writes, “They have purchased the Island of Manhattes from the savages for the value of 60 guilders.” (There is a surviving deed for Manhattan and Long Island, but this was made well after this initial Manhattan purchase, when the Dutch had already been inhabiting the island for several decades.)
As far back as 5000 years ago Mesopotamians used clay tablets but found them to be impractical for their wallets and purses.
Melting down tons of copper was not a much better option as you needed a horse and cart full of copper to go shopping at the renaissance mall.
In the 19th century, merchants would use “credit coins” and “charge plates” to extend credit for local farmers and ranchers, providing credit until their crops and livestock were sold.
Growing up in the 20th century long before Internet, payments were primarily made in cash or with a paper check.
In1946 guy by the name of John Biggins, a banker created the”Charge-it” card.
Purchases were forwarded to Mr. Biggins bank who reimbursed the merchant and chased the customers for payments.
This was coined the “closed loop system.”
Five years later, New York’s Franklin National Bank issued its first charge card.
Charge cards like the Diners Club card and American Express emerged but banks found a gravy train with consumer cards providing revolving credit with Bank of America leading the charge <-pun, in 1958.
Franklin’s marketing plan was to mail out thousands of cards arbitrarily to folks in California.
In 1966 MasterCard was born out of a group of banks forming the Inter-Bank card Association (ITC)
Bringing us to “now,” the buffet of payment processing choices is large enough for a kings celebration.
- Credit Cards
- Mobile Payments
- Bank Transfers
- Prepaid Cards
- Direct Deposit
Cities are trying to ban cashless businesses
Good luck with that.
What’s even more remarkable is the exponential explosion of companies and methods for processing money online.
Here are a few that I found, I’m sure there are more
PayPal (237 million people have active PayPal accounts)
Visa checkout (20 million active customer accounts worldwide)
ACH (a U.S.-specific payment method) increased by more than 1 billion in 2017 for the third year in a row)
Ali Pay (China)
iDeal (the Netherlands)
Sofort (Austria, Belgium, France, Germany, Italy, and Spain)
Boleto Bancaio (Brazil)
SEPA Direct Debit (500 million Europeans)
Begin Quicker Online Store Cash Flow And A QuickBooks Accounting Hack
Every article you’ll read and all the questions you see on LinkedIn about merchant processors sound like:
“What’s the best merchant processing rate I can find?”
“What are all those fees and will they keep me PCI DSS compliant?”
Editor’s note – We currently use PayPal exclusively online for credit card processing (and PayPal Express) which does not require PCI DSS compliance.