Nowadays, many companies and businesses use payment processors, a financial tool that facilitates electronic transactions and allows them to reach new markets, as well as offer a better shopping experience. Next, we will learn about the history of payment processors (Payment Processor).
Payment processors
Payment processors are tools (that act as intermediaries) that allow the carry-out of electronic transactions between two parties (customers and businesses). A payment processor allows the transfer of funds quickly, efficiently, and with a high level of security.
It should be noted that the concept of “payment processors” has evolved over time, focusing mainly on managing business transactions in a manner that is safe, flexible, and efficient, which is why these tools continue to grow and adapt to new technologies and consumer needs.
Beginnings
Payment processors had their beginnings in 1958, specifically at the hands of Bank of America, when it innovated with the first BankAmericard credit card, through which consumers could make credit purchases using paper vouchers.
Between the 1950s and 1960s, companies such as Diners Club and American Express also launched their first credit cards.
Pre-Internet electronic era
In the late 1970s, BankAmericard was renamed Visa, which, relying on technology, introduced the credit card terminal in 1978, which allowed them to transform the paper voucher payment processing service into an electronic transaction payment processing service.
It is important to note that the first point-of-sale (POS) terminals for processing card payments were connected to telephone lines and required manual confirmation.
Thanks to the rise of this type of technology based on electronic payment platforms, during the 1980s the need for new payment terminals arose, which drove the development of hardware manufacturers such as Hypercom, Ingenico, and Verifone.
Evolution of the Internet and online payments
The 1990s saw the rise of the Internet. This technology had a significant impact on payment processors, as the technology applied in physical payment terminals was implemented by Fintech companies on the Internet, which allowed the development and implementation of different online payment gateways.
The rise of the Internet and the implementation of payment gateways were technologies that were adapted to existing payment processors. However, in 1994, eBay and Amazon were launched, which led to the development of another type of tool. At that time, payment processors found it necessary to develop “virtual payment terminals” that could be implemented in electronic commerce.
Payment processors today
As we have seen, payment processors have been evolving as technological advances arise. This is because they are constantly updating and seeking to offer more secure, efficient, and flexible payment solutions, especially to accept different payment methods and adapt to the new needs of consumers and companies.
Currently, technological advancement has allowed payment processors to expand their capacity, especially with the adoption of blockchain technology, support for digital wallets and mobile payments. All of this has made it possible that, in addition to accepting FIAT money (such as dollars or euros), they also accept different cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), or Tether (USDT).
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