History of Electronic Money Electronic money is a fairly recent invention in the history of money and commerce, and typically means that currency with real value, and which can be exchanged for traditional cash, is instead entirely digital or virtual.
Electronic money only exists in digital format, and can be primarily based on the Internet or on smart cards that maintain a record of their stored value. Transactions carried out electronically are also known as electronic money. Other names for electronic money include e-money, digital cash, digital money, digital currency, or electronic cash.
The age of he computer has made possible the creation of electronic money, and began back in the s when IBM and American Airlines jointly created a system kown as SABRE Semi-Automatic Busines Research Environment which allowed offices of American Airlines to be fitted with terminals connected to telephone lines that would allow agencies to directly check flight times, seat availability, and then electronically make reservations that could be paid for using a system of credits.
By the s banks in the US and Europe had started using mainframe computers to track transactions between branches and other banks, a system that proved particularly successful across international boundaries when currency exchange was needed.
Mia Francis-Poulin 0Shares Imagine. You want to purchase a doughnut at the local bakery, but instead of handing over your credit card, you reach into your pocket and pull out a few grains you picked on your farm earlier that day. After all, the baker can use the grains to make more dough.
Initially, any transactions that had been initiated but not cleared were effectively in limbo, and as computer use spread within corporations, tracking funds that were processed electronically became an important financial consideration.
Consumer uptake of electronic money first started to be noticed in France with the introduction of the Minitel service in that operated in a similar way to pre-Internet bulletin boards. Countries like the UK and the US had developed basic teletext services that allowed televisions to display text such as program guides, weather, creating and developing a trading plan for a trader examples show results, or news directly onto the television screen, with users keying in page numbers on their TV remote control to access pages.
The French Minitel service by contrast used a dumb terminal with built in modem and since the service operated over standard telephone lines and the terminals were equipped with full AZERTY keyboards, it was possible for subscribers to type messages, or search queries, a fundamental difference from teletext services.
The French Minitel terminals were given away free to over 9 million households how to make the first electronic money French business entrepreneurs to offer Minitel shops such as travel agencies, flower delivery, As Seen on TV, music catalogs and more. Payment build an options strategy be made using credit card or charged to the telephone account, marking the first use of electronic money in the consumer market.
Ina service known as Homelink started withthe support of the Bank of Scotland and Nottingham Building Society where account holders could subscribe to a special Prestel service that allowed online banking, and marks the first recorded use of electronic money.
Electronic funds transfer
In the US, similar services to the French Minitel and the UK Prestel existed, but without dedicated hardware, users would own their own micro-computers and modems how to make the first electronic money pay to dial into a local bulletin board service such as Compuserve or TheSource, however transactions for products and services were not offered until when US grocery delivery company Peapod was founded in Evanston, Illinois and sold a dial-up disk with software allowing customers to order and pay for groceries that the company would later deliver.
Inand taking a lind leap of faith that the Internet would help their business, Pizza Hut adopted the same model used by Peapod, and thus allowing online pizza ordering, with a choice of payments, credit card vie he Internet, or in person on delivery.
The same year J. Penney start their first website offering a department store on the Internet, sales are slow but company shareholders are happy to see the corporation taking the initiative. The late s were a pivotal moment for electronic money as Amazon.
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The services offered by PayPal marked the true beginning of electronic money as being distinctly different from traditional over the phone and online credit card processing. Virtual currency backed by precious metals can be exchanged for any supported currency, but is typically tracked as direct comparison of the price the precious metal is fetching in the international precious metal markets.
Return to Content History timeline The EMA history timeline and the early days: In the s, a range of electronic purses and new payment products were developed and deployed, mainly by the existing payment providers, banks. They were largely intended to replace physical coins and bank notes, and the expectation was of rapid adoption.
Webmoney, e-gold, and eLibertyReserve have become the biggest gold backed electronic money providers. Electronic money virtual wallets provided by major corporations such as Verisign started to become available, encouraging an explosive growth in eCommerce.
The first years of the new millenium saw the creation a number of cryptographic techniques for the prevention of personal data, and strong growth in the use of electronic money as a primary medium for payments and transactions.
In the US, most banks began offering online banking facilities connected to payments options that allowed utilities and credit cards to be paid using any public computer.
Private currencies also proliferated around the same time, originally spurred by the demand for some form or marketplace within networked games such as World of Warcraft and Second Life.
Private currencies are sometimes redeemable for real world currencies at a fixed rate pegged to the dollar or other major currency. Since those times, private currencies have developed in many forums and webmaster services as a means of offering advertising amongst members, the most famous of these perhaps being Entrecard, a service where users visit other blogs and are paid in Entrecard Credits, which become redeemable for cash once a reserve level has been met.
In the offline world, perhaps the most successful electronic money has been facilitated with stored value cards that are denominated in local currency. In Hong Kong, a stored value card originally designed to make subway ticket purchases quicker has become a defacto cash card now accepted by a majority of retailers and utilities in the city.