Digital Payments: The Evolution of Currency

Over the last decade, the digital payments landscape has undergone a structural shift.

Consumer behaviors are changing—moving towards contactless and cashless transactions. Meanwhile, as the magnitude of COVID-19 grows, these trends have only accelerated.

Today’s infographic navigates the digital payments ecosystem, exploring its history and innovative technologies, and how it continues to grow as a solution of choice for trillions of dollars of transactions each year.

Digital Payments Timeline

The origins of digital payments began over 25 years ago with then 21 year-old entrepreneur Dan Kohn in Nashua, New Hampshire, who sold a CD over the internet via credit card payment.

• 1994: First online purchase is made
  A CD of Sting’s Ten Summoner’s Tales is sold for $12.48 on NetMarket.
• 1997: First mobile payments and first contactless payments
  Coca-Cola installs two vending machines in Helsinki that accept payment by text message.
• 1999: Paypal launches electronic money transfer service
  Early on, PayPal’s user base grew nearly 10% daily. Tesla CEO Elon Musk and venture capitalist Peter Thiel were among its co-founders.
• 2003: Alibaba launches Alipay in China
  Today, the mobile payment platform has witnessed stunning growth — leveraging digital wallets accepted by merchants in over 50 countries and regions.
• 2007: M-PESA creates the first payments system for mobile phones
  Kenya-based M-PESA launched its mobile banking and microfinancing service. Today, it has over 37 million active users on its platform across Africa.
• 2009: Bitcoin enables secure, untraceable payments
  Satoshi Nakamoto develops the first decentralized payment network in the world.
• 2013: WeChat Pay is rolled into the popular messaging platform
  By 2018, it surpasses 800 million monthly active users.
• 2014: Apple Pay launches
  By 2023, over $2 trillion of mobile payment transactions could be authenticated by biometric technology.

As technological advances continue to unfold, advances in digital payment technologies are creating ripple effects globally.

Singapore has the highest number of cashless payments per individual, averaging 831 cashless payments annually. The country’s robust e-commerce market is supported by high-speed, reliable internet and a young, tech-savvy population.

With e-commerce spending accounting for about 6% of South Korea’s national GDP, it is another leading purveyor of a cashless society. Meanwhile, Sweden is projected to become a cashless nation as early as 2023.

Pivotal factors—including core infrastructure, consumer behavior and rising revenues—provide a glimpse into the rapidly changing payment horizon.

The Future of Digital Payments

As transactions rise, a number of other technological innovations could be instrumental to shaping the evolution of the digital payments industry:

The $4.1T digital payments ecosystem is facing a notable transition, catalyzed by a wave of global advancements and disruption. As the industry continues to widen its reach, consumers and investors alike can benefit from the shift towards a cashless economy.

1. Messaging-app payments
   Facebook Messenger, WhatsApp, and WeChat can leverage the reach of billions of users.
2. Voice-activated commands
   Paying for gas, groceries, or retail via voice could soar.
3. Peer-to-peer (P2P) payments
   Bank of America and Visa are investing heavily into P2P partnerships.
4. Cryptocurrencies
   Over one million transactions take place daily on average.
5. Biometric payments
   Smartphone biometric security features could spur traction across digital payments.
6. Facial recognition
   May soon replace QR codes across retail, transit, and airports in China.
7. Crypto wallet adoption
   Blockchain wallet users are predicted to soar to 200 million by 2030.
8. Hardware & in-store interfaces
   Square, Stripe, and Clover are driving new mobile processing integrations.

(Click on image to enlarge)