Historical perspective of innovation in electronic payment instruments

Abstract

Electronic Payment Instruments have seen unprecedented innovation in the past XX-th century. Most of this innovation was made possible by advances in information and communication technology. Advances in ICT paired with financial innovation have brought to life the nowadays so common credit/debit cards, expeditious processing of electronic funds transfers, online and mobile payments. Past innovation in electronic payment instruments built primarily on top of a pre-existent base. Also, it developed along the opportunities opened up by technological innovation. Revolutionary business models like Global Transaction Services would have been very difficult if not impossible to implement without the progress in IT, IT infrastructure and integration. In addition, future innovation will continue to be bounded by regulatory and legislative frameworks in the financial and banking industries. Evolutionary trends in innovation in electronic payment instruments can be affected also by any shifts in the monetary systems predominant at a certain point in time. Future innovation trends will be shaped by the current advances in online and mobile electronic payment instruments in the United States and in other OECD countries. Large markets like China and India are important technological stakeholders as well, picking up and implementing quickly the new technology to address their development needs.