Evolution of digital payment methods over past decades


The mechanism of payment gates has changed completely over the last two decades. As a next major item to modern enhanced and updated digital methods of payment, debit and credit cards have become increasingly common. Online assignment help you provide you all the information related to digital payment method, so read this blog complete and then implement this.

The paradigm shift has been major. Numerous means to digitally pay for commodities and services are now available, with some proving more popular than the rest.

How have payments evolved in years?

Have a deep read as we guide you through the journey of new and innovative payment methods that have evolved drastically over the current 21st century.

Have a thorough reading as we take you through new and inventive methods of payment that have dramatically evolved during the past decades.

  • Debit and credit card

The significant move towards cashless payment occurred around 1969 when Bank of America issued its first general-purpose credit card. Soon after, Visa and MasterCard came and became much more popular, replacing cash payments to a significant amount. Security was a big challenge for card issues, but with regular and rapid upgradation in technology, massage changes have taken place.

  • Online Banking

With the internet boom in the 1990s, an evolution of digital payment took place. The new technology for web-based approach for baking started to develop. It helped to reduce the banking overheads drastically reduced. Moreover, online banking services aimed to provide greater convenience to the customer. During the period, most people were skeptical about the security and were worried to switch to a new method to trust with privacy,

However, moving to current times today, almost majority of people around the world use some online banking service in their day to day life,

See Also: best crypto credit cards in Canada

  • E-Wallets

The Ewallet initially gained a spark of popularity with the merger of Paypal and X.com in 2000. After the acquisition of paypal by ebay for 1.5 billion dollars, the market for e-wallet was contented and a new turn case in the digital payment world. The advancement in the new mobile technologies worked as a growth fuel for ewallet. Google and Apple pay highly capitalized on wallets and have become hugely popular.

  • Cryptocurrency

Although there were countless experiments on developing online currencies with ledgers secured by encryption, none was successful until 2009 bitcoin finally arrived. It was the first online currency. Bitcoin was used to make payments anonymously as the personal and financial details were not traceable. The transactions were secured and were stored in a blockchain. With the lower operational cost, crypto became fairly popular among online gaming, charity, food industry, and sports business.

  • Open Banking

Open banking provides a reliable way to make digital payments directly through the bank using a mobile as a medium. Open banking has shaken the digital payment sector after making a huge impact in various European countries. It is focused on such open banking services that can go global as they have the potential of being the preferred payment method for Ecommerce and financial services.

Open baking gives consumers much greater control over their finances and provides relief to merchants, ensuring that there will be no flaws.

Digital payment trends

Finally, it examines three themes reshaping the sector, including how rising fraud, a revenue crunch, and increased demand for white-labelled payment capabilities from non-traditional players may spur change in the coming years.

As businesses and customers migrate from traditional payment methods to modern digital payment methods, the payment industry’s power dynamics have radically transformed. Whereas online wallets such as Apple Pay are attempting to increase their user base, cash has switched to cards in retail outlets.

With e-commerce eroding storefronts, online payment options are contributing to the development of digital buying. In addition, customers are finding digital peer-to-peer apps to be more appealing and useful than ever before.

The three most significant changes in the payment business in recent years are as follows:

  • Payment methods in store

Retail payment methods declined approximately 3-4% in the preceding year yet account for most sales. The debit and credit cards are still prevailing while checks and the use of cash slowly decrease as payment modes. And the mobile payment of years shadow controls digital payment as the means of trade and is slowly replacing the use of cards.

  • E commerce/E Trade

It continues to take on the share of the payment store of retail business with Serge in e-commerce. In the past year, smartphone-based wallets increased with this rising spending and transaction, leading to an increase in the online retail of around 800 billion.

  • Digital payment

The digitization of payment isn’t just limited to retail, though real-time mobile payments, digital remittances, and business payments continue to blossom as change spreads through the ecosystem. Mobile proximity volumes accelerated to an all-time high, but insider information estimates that most record users are added to the list during past pandemic years.

  • Credit card

Credit card payments increased 3% compared with 2019, representing about 0,79% of CAGR. High credit appetite and comprehensive programmes to expand as issuers keep the payment solution up to the bill boost expenditure and help to boost the segment’s growth, slowing down from inflammation.

  • Open banking reshaping the banking industry

Customer centre models have long fueled most of the paid industry. No exception is open banking. The client data presented by the banking institutions help for0 a tailor-made approach. It heals customer ties and helps clients and banks maintain their customers’ credit risk analyses.

Issues with current online payment methods

New technology like mobile payment, e-wallet, and contactless cards are easier and smoother for business-to-business and business-to-customer engagements. Moreover, with the increasing demand for additional payment features and alternatives in the online payment processing market, user expectations lead to growth in many areas.

Providers are under pressure to offer payments across the traditional banking model, including for mechanical transactions such as parking or selling equipment, to a cashless company, which can enable any purchase. However, those requirements generate technical hurdles for businesses, processors, and users.

Below mentioned are the active challenges faced in the online payment sphere

  • Slow and inefficient transaction across borders

In global trade, cross-border transactions play an important role. In the majority of the banking system worldwide, such systems have not been built that can successfully manage cross-border payments which result in the creation of informative technologies and platforms which complicate online payments across borders,


  1. Externalizing cost-cutting
  2. County has spearheaded projects
  3. Transnational system development
  • Multi-currency payment

Payment processes that are smooth over the world are required for online and global shopping. It makes businesses more competitive, but for merchants, building a seamless multi-currency payment system necessitates creating new accounts and clearing regulatory hurdles for each currency.

  • Solution

Using a payment service provider with pre-existing infrastructure can give quick and efficient solutions to these problems. For example, a businessman can quickly collect money in a single currency and convert the merchant’s account to their own. In addition, a good PSP can process payments, credit and debit cards, and mobile payment systems safely (for example, mPesa).

  • Integration of technology

Digital payment systems run on multiple hardware and software platforms at the same time. Card-based payment processors necessitate increased security, which is costly for shops. The absence of an interface across processing systems adds to the cost—a PSP’s ability to link with other systems may be difficult or impossible, resulting in processing and payment delays lost transactions, and high costs.

  • Solution

A payment processor that allows for immediate and individual processing of transactions can open customer accounts with many acquiring banks, avoiding the delays that automated clearinghouse processes sometimes.

  • Fraud and chargeback

As the use of online payment systems has risen, so has the exploitation of payment networks and data theft. Moreover, the chargebacks have added to the problem. With the low secure network usage in the online space, it becomes easy for hackers to target a customer payment over a network. In most cases, a low secure pin and passwords result in this problem, leading to cheating and fraud with customers.

  • Solution
  1. Two-way payment process
  2. A biometric-based authentication
  3. A more secure internet mode
  4. Adoption of advanced EMV technologies
  • Card data security

Whether online or offline, every retailer or business that accepts credit or debit cards must be certified by the Payment Card Industry Data Security Standards (PCI DSS). Merchants and processors must achieve 12 requirements across six security areas to comply with PCI DSS standards:

  • Solution
  1. Create and manage a secure network and systems infrastructure.
  2. Safeguard the information of cardholders.
  3. Keep a vulnerability management programme in place.
  4. Put in place strict access controls.
  5. Monitor and test networks regularly.
  6. Keep an information security policy in place.

About Author

Tillock Watson holds a bachelor’s degree in English and minors in professional and creative writing. She is now working with Assignment Achievers. Assignment Achievers is a top-rated online assignment writing help provider worldwide. As a content writer, she is also interested in establishing new company services and marketing trends. She is also involved in the creation of unique content strategies for small businesses.


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