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Confirmation of identity
The differentiator in a competitive biometric payments market is not only fast, involves secure transactions, but also a form not available from other payment operators.
Payment with an eye is not only convenience, but also an interesting experience.It’s freedom,because without cash, card or phone, you can pay for purchases in the store or dinner in a restaurant.
PayEye can stay ahead of the competition and respond to current needs – yours, the marketand your customers!
The first ski resort in the world where you pay with… your eyes
The ski resort in Machnice — a place well known to skiing enthusiasts from Wrocław and its surroundings — launches payments with the eye. Snow and Ski Machnice will be the first ski resort in Poland, the first in the world and the 100th partner with the innovative iris payment system from fintech PayEye. Following the relaxing of government restrictions, the facility is due to open to skiers as early as this Friday, 12 February.
“The phone has been ringing since the first snowfall and, like the skiers, we can’t wait to reopen. We are doing our best to be ready for Friday. In addition, we have prepared a complete novelty -– an eye payment. We liked the idea very much, and we believe that it is an ideal solution for our ski slope guests. Skiers have enough equipment with them and looking for cash, or a card to pay is often a problem. Now it will definitely be easier for them because they will not have to remember these things. You could say that they will pay with one look,” says Emilia Ptak, co-owner of the facility in Machnice.
Snow and Ski Machnice offers two ski slopes and the possibility of night skiing until 10 p.m., a ski school and a restaurant — now selling takeaway meals. And all this is only 15 km from the borders of Wrocław in Machnice, in the district of Trzebnica. A surprise awaits skiers who take advantage of the eye payment. Besides, registering online at payeye.com will allow you to benefit from a refund for your first eye transaction of up to PLN 50, while you are already on the slopes.
“Eye payment is convenience, security and choice. Forgetting cash or having a dead phone is no longer a problem. Ski enthusiasts want complete freedom, and that’s exactly what the payeye idea we brought to life was all about. Today we already have 100 locations on the map of Wrocław and its surroundings where you can make eye payments, and this is not the end,” says Krystian Kulczycki, President of PayEye.
PayEye launched eye biometrics for commercial use in payments at the end of June 2020. Today in Wrocław and its surroundings, you can pay with your eye, among others, in restaurants and cafés, grocery shops and delicatessens. Service outlets, petrol stations and car washes are also on the list, and the sports and leisure industry is also strongly present.
Some of the places that have attracted the most interest, where the eye payment system has recently appeared, include Wrocław’s Aquapark, the ice rink at the Wrocław Stadium, or AC Hotel Wrocław, which operates as part of the world’s largest international hotel chain, Marriott International.
Snow and Ski is a ski resort which is a part of the sports and recreational Ptak Machnice complex. It has been in operation since 2017 and is located on the southern slope of a hill in the Trzebnica Hills range. The resort has its own snowmaking system, which ensures optimal conditions even when there are no visible signs of winter in the surroundings. It is located 15 km from Wrocław, by the national road No. 5 (Wrocław-Poznań) and is the nearest ski resort to the Wrocław agglomeration.
More information: www.ptakmachnice.pl/snow-and-ski.html
The REIMBURSEMENT action has started
Create an account with PayEye, make the first payment with your eye and we will refund you up to PLN 50*!
*The maximum amount of the refund is PLN 50.
The campaign runs from January 18, 2021 to March 31, 2021. Promotion terms and conditions: Regulations of the “REIMBURSEMENT” promotion – PayEye promotion – a single glance is enough
List of places where you can pay with your eye: https://payeye.com/lista-partnerow/
AC Marriott Hotel, you can book a room with … the eye
AC Hotel by Marriott Wrocław is the first hotel in the world to provide
PayEye eye payment service to its guests. Despite the pandemic, the hotel
industry is committed to the development and new technologies – automatic
disinfection, on-line checking in and opening doors with a smartphone are
just some of them. And history has made a circle because it was the
Marriott Hotel (Warsaw) that several decades ago, was the first hotel in
Poland to introduce card payments.
AC Hotel Wroclaw is located in a renovated historic building in the heart of
Wrocław, right next to the National Forum of Music.
“The AC by Marriott brand itself is located in the four-star lifestyle segment
and is open to new technologies. Our guests have the possibility to check-in
and check out on-line, they can also open the doors of their rooms with their
own phone, which is facilitated by a special application. Now we are taking
the next step and introducing payments with the eye. Innovation fits
perfectly not only in the DNA of our business but also in the needs of our
guests. And they follow the novelties and willingly use the technical
novelties especially during a pandemic,” says Aneta Jeton-Szotek, CEO of
AC Hotel by Marriott in Wrocław.
The Marriott chain has always been associated not only with luxury but also
with innovation. The first terminal for cashless payments by card was
installed at the Marriott Hotel in Warsaw in 1992. From now on, the
Wrocław hotel operating under the Marriott chain is the first hotel in the
world where you can pay with just one look.
“A payment that we can make without having a wallet, card, phone or any
other item is a direction that cannot be changed. Moving away from cash is
a trend that has been accelerated by the coronavirus pandemic and is
supporting the development of our biometric payment system. Just during
the pandemic, PayEye has implemented the world’s first payment with the
eye, and we are delighted that guests of AC Hotel Wrocław, who are very
important to us, will join us. I hope that the restrictions that affect the hotel
industry will soon disappear and will allow us to benefit even more from the
innovations that make our lives easier,” says Krystian Kulczycki,
President of the PayEye, fintech based in Wrocław.
AC by Marriott Wrocław is a 4-star, lifestyle hotel with a swimming pool and
spa area, where each of 91 rooms is individually decorated. Some of them
have terraces with a place to relax and with a view of the city. AC Hotel
Wrocław was built in a renovated tenement house, which once housed the
Reich Bank. In the basements of the former vault, a place for the original
wine cellar was developed. Marriott International is the world’s largest
international hotel chain, which operates in various formats and under many
(31 currently) brands – including AC.
PayEye joins Impact finance’20
PayEye – Wrocław-based fintech which was the world’s first to introduce iris
payment, was invited to the Impact finance’20 event, the first event in
Central and Eastern Europe (CEE) for experts from the world of banking,
payments, technology and commerce. PayEye has been recognised as one
of the 12 most interesting startups in the CEE region.
The fifth edition of Impact finance was scheduled for 25-26 November 2020
– over 100 activities – presentations in 5 thematic paths, report
presentations, workshops, roundtables and networking sessions.
“The new circumstances of recent months have created new challenges.
The financial industry has never been so fast-moving: the effects of the
pandemic, climate change and the growing need for digital deployment are
driving the global transformation,” explain the organisers who invited
PayEye to this project.
The Wrocław-based fintech company has been included in the prestigious
group of only 12 most interesting startups from Central and Eastern Europe.
This is all the more important because Impact finance has a reputation and
gathers the most important names from business, innovation, politics and
science in the CEE.
PAYEYE RUN – big-hearted runners helped sick children
We have collected exactly PLN 14,764 for the charges of “ZOBACZ
MNIE” Foundation. All this thanks to the joint work of the organisers,
partners and runners during the 1st PAYEYE CHARITY RUN –
“ZOBACZ ME” [SEE ME], which was organised on 10 October in
Szczytnicki Park and in the Centennial Hall, for the benefit of the little
charges of the “ZOBACZ MNIE” Foundation. On Tuesday, 20 October,
the charity action was finalised in the Wrocław Market Square, and a
symbolic cheque was donated. Running and helping is still possible.
Despite the cold weather and new restrictions, which came into force due to
the quarantine, on Saturday, 10 October, a set of competitors appeared at
the start line of the run. Nearly 150 players took part in both distances: 5
and 10 kilometres, which is the maximum possible number in the current
situation. There were more people willing to participate, but we had to
respect the restrictions in order to ensure the safety of the participants first
“This was one of the first events in which we dared to take part after the first
wave of the pandemic and, as we already know today, probably also one of
the last in the coming months. We have hard times now, and we, as a
foundation, feel how difficult it is to find funds to help children. Meanwhile,
the disease will not wait until everything settle down. Help is needed here
and now. That is why we are all the more grateful for the support we have
received thanks to the great-hearted runners,’ explains Agnieszka
Aleksandrowicz, President of the “ZOBACZ ME” Foundation.
The organisational costs of the charity run were covered by the PayEye
company, thanks to which all the funds collected from the starter packages
went to the treatment of the charges of the “ZOBACZ ME” FOUNDATION.
The company also provided its own resources to help sick children.
”Business must not only be modern but also responsible. The pretext for the
charity action was World Biometrics Day. I am delighted that, at this
challenging time, we have been able to join in helping sick children who
have to fight even more adversity. The activities of the “ZOBACZ ME”
Foundation are becoming even more important now,” says Krystian
Kulczycki, President of PayEye, the first company in the world to introduce
a complete payment system based on payment acceptance and user
identification using iris biometrics.
The prizes for the winners, apart from the main partner of the run – PayEye
fintech, were funded by Mercedes-Benz Grupa Wróbel, and OSHEE that
donated the drinks to the starter packages. Hearts and muscles of our
athletes were warmed up by specialists from Body Change Center. They
were warmly cheered on by Olympic medallist – Paweł Rańda. The Lower
Silesian Volunteer Ambulance Service in Wrocław was responsible for
Until 31 October, you can still help by taking part in a virtual run –
PAYEYE RUN – ZOBACZ MNIE. This is an opportunity for all those who
wanted to take part in our run and could not be with us on that day. What
you need to do to run with us:
– pay a contribution of PLN 49 to the foundation’s bank account with the
reference: virtual run,
Bank account number: 12 1090 2398 0000 0001 4307 1844 –
SANTANDER BANK POLSKA SA
– post a picture of your run (the distance doesn’t matter!) and a proof of the
contribution payment of the event page of the ZOBACZ ME Foundation
Facebook profile. Each participant of the run, as before, will receive a
starter package, including A MEDAL, “THANK YOU” LETTER, T-SHIRT,
CAP OR FACE MASK The entire donation will be donated to the treatment
of our charges. These brave warriors need you today more than ever.
President of a Wrocław-based eye payments fintech becomes Manager of the Year
Krystian Kulczycki, President of a Wrocław-based fintech — PayEye, has become Manager of the Year. This was decided by the competition jury of the FinTech & InsurTech Awards. President Kulczycki manages a Wroclaw-based company that was the first in the world to introduce a proprietary payment solution based on human iris recognition. Although the service has only been available for a short time, after three months the pilot project already covers over 60 locations in Wrocław. The award was presented at the FinTech & InsurTech Congress, held recently in Warsaw. The Congress is one of the most important events in this part of Europe, bringing together the best experts from the financial technology and insurance industries.
“Experienced manager and specialist in the management of banks and financial institutions — President and Co-Owner of PayEye, a fintech in Wrocław — Krystian Kulczycki. Stoicism, high professionalism and a great sense of humour are the features thanks to which he is the leader of the team that has introduced an innovative and visionary solution to the market — a payment system based on the biometry of the iris of the eye.” — this was the justification for the award given by the independent competition jury, which includes respected representatives of the wider business — mainly CEOs.
“I am delighted that we have brought to market a real innovation that is generating such interest. The award is satisfying, but it is obviously a credit to the entire PayEye team and our partners who have contributed to the fact that the market has noticed us. I have the personal satisfaction that the award is decided by industry representatives, who considered both the payment system we implemented using iris biometrics and my extensive financial industry experience. This award is not only a great joy, but also an obligation to be even more active,” says Krystian Kulczycki, President of PayEye. “Our roots are firmly planted in Wrocław, but we are creating a brand with a global dimension. PayEye is an entire payment ecosystem that works based on human iris recognition. Our system is not only independent but also secure. We combine science with technology and take this combination to the business world.
Krystian Kulczycki has been involved in the financial industry for over two decades. He was a member of the management boards of, among others, Polskie Towarzystwo Finansowe, PTF Bank, Santander Consumer Bank and Eurobank. He is currently involved in company development matters as a president and co-owner of PayEye.
The FinTech & InsurTech Awards competition aims to popularise personalities and ventures that promote technological solutions in the financial and insurance industry. The awards are presented to representatives of both fintechs, insurtechs and representatives of traditional banking, insurance and lending industries, who, with their innovative solutions, develop Poland’s sector. The awards are decided by an independent competition jury, which includes respected representatives of the wider business community.
Biometric market potential
Have you wondered what the payments of the future will look like? Until recently, the identification of a human being by means of fingerprint, iris, face, voice recognition or analysis of the use of the keyboard seemed to be far from reality. Nowadays, biometrics are increasingly used in everyday life and will become the standard for confirming identity. Biometric identification is faster, more convenient and, above all, safer than standard solutions.
Biometry has always been a part of our lives. The word biometry comes from the Greek words bio (living, life) and metron (measure). Biometry, therefore, means measuring the individual characteristics of the human body to confirm identity. The human is the password themselves. Biometric methods are divided into two groups: physical and behavioural. Physical methods are solutions that confirm identity based on unique human characteristics, e.g. biometry of fingerprints, iris, blood vessels or facial geometry. Methods that examine physical characteristics include biometrics of voice tone and gait.
Biometry has been known since the beginning of humanity. Already in prehistoric times, artists stamped their drawings on the walls of caves with palm prints.1
So biometrics is not new. The world offers a wide range of biometric solutions that confirm user identity in many areas of life. The door to our house may have a built-in fingerprint reader, so we open it without using a key. To unlock the phone we don’t need to enter a PIN, just a scan of our face. The finger or hand vein layout reader allows us to access rooms or systems without wearing badges or remembering difficult passwords. You can already log in by voice on the helpline with the bank.
And what about the world of payment? Although cash is still important, we make more and more non-cash transactions every year. Statistics published by the National Bank of Poland on payment cards after the second quarter of 2019 show that Poles have 42 million cards in their wallets, with transactions totalling PLN 200 billion, and in the third quarter of 2019 the number of contactless transactions exceeded one billion for the first time ever. Cashless shopping is simply more convenient. We confirm transactions using card, Blik, Google Pay, Apple Pay. We pay by phone, but also with wearables. The most popular are watches, but we can already pay with rings, fitness bands or bracelets. Digital payments will strive for much greater simplicity. The trend of this transformation is unstoppable.2
What is our consumer approach to biometrics? According to the Mastercard study entitled “Secure e-shopping”, almost half of Polish e-consumers would like to biometrically authenticate card payments, either in a stationary store or online.
Polish consumers are open to the use of biometric forms of payment confirmation.
According to 46% of them, greater security at the payment stage would encourage them to shop online more often. 76% believe that strong online card payment authentication is needed and that an additional element confirming the user’s identity and increasing the security of transactions will encourage many of them to shop more often online.4 According to Digital Payments Study 2017 report prepared for Visa, Polish consumers are open to modern digital payments, including biometrics. 86% of them have already made a contactless payment, and almost 90% of them think they will pay with a smartphone within three years. Contactless payments opened Poles to new, innovative payment solutions. 83% believe that biometrics is a secure form of authentication. At the same time, most of them would feel secure if biometric solutions were used to authorise these transactions.5 The answer to consumers’ needs is the introduction of the European Union PSD2 (Payment Services Directive 2), which regulates the payments market. The Directive introduces so-called strong customer authentication (SCA). According to these provisions, when logging into the system or making a card payment for online purchases, the consumer must confirm their identity using at least two out of three possible elements of authentication: knowledge (what the customer knows only, e.g. a password), possession (something that the customer only have, e.g. a phone) or characteristics of the customer (something that characterises the customer only, e.g. a fingerprint).6 Biometric features of the customer – fingerprint or facial features, are unique, difficult to steal, affect the quick, but above all safe payments. They reduce the risk of fraud. That is why the major payment solution providers declare that they will develop their tools precisely towards biometrics.7
And how can future payments look like? We expect more and more freedom, comfort and above all safety. We want to make payments faster and more efficiently. Card payments seem a simpler solution than cash. I can buy what I want and how much I want – as long as I have the money in my bank account, of course. The amount of cash you have is no longer a problem. Contactless payments are even faster; I put the card on the terminal and done. Did you forget your card? It’s not a problem at all. You have a phone, so you can confirm the transaction on the phone. Is your phone flat? You can pay with your watch. What if the watch breaks, gets flat? Or maybe biometrics alone is enough to make payments? And here comes the solution of the Wrocław-based company PayEye, which is the first in the world to launch iris payment on the commercial market. You can pay with one look without any unnecessary accessories. Check out PayEye and enjoy your life!
Safe shopping using the iris
People have long been looking for better ways to make payments. Better means more comfortable, simpler, faster and safer. For a long time, only coins and notes were used. This quite simple solution has its advantages, but it also has its disadvantages. From small, everyday ones – sometimes there are problems with getting the change out, you can just not have cash on you, to the serious ones – material money is susceptible to counterfeiting and can also be stolen. The next step in the development of payments – payment cards – eliminates some of these problems. The card is smaller, you just have to carry a small piece of plastic (you can still forget it, though), problems with the change are dropped, and a PIN protects our money. If this were to go one step further and develop a method devoid of all these disadvantages, leaving only their advantages? The search is ongoing, and most of them are proposals based on biometrics.
Biometric methods enable the identification of the customer on the basis of their individual characteristics. This way, we retain all the advantages of a payment card and eliminate its disadvantages. In the case of biometric payments, we always carry our “wallet” with us – you can’t forget it – and payment is even faster and simpler.
Personal features that can potentially be used to authenticate payments include fingerprint, its vascular features, face oval, ear shape, iris of the eye.
What criteria are taken into account when choosing the best biometric solution?
- method effectiveness
- the invariability of a given feature in time
- easy to read features by an appropriate device
- security of data acquisition and data retention
- health security of the identification process
The efficiency of the biometric method is measured using two measures. The first is the FAR (false acceptance rate), which determines the probability that the system will wrongly grant access to an unauthorized user; the second is the FRR (false rejection ratio), which determines the probability of an error in denying access to an authorized user.
Effectively means safely
Such an understanding of effectiveness is strongly linked to the security of the use of a specific biometric method in the payment process. In the case of a false rejection where the system does not grant the customer access to their funds, the result is likely to be frustration (resulting from the inability to purchase a good or use a service). False acceptance is much more dangerous if an unauthorized person gains access to another customer’s wallet.
In order to ensure the highest degree of efficiency, the selected biometric feature should be distinguished by its absolute uniqueness. The iris of the eye meets this condition.
An iris, if you look at it very carefully, consists of many different elements – circles, waves, zigzags or “tassels”, which in each person are arranged uniquely and differ in their arrangement, shape and size.
The iris of the eye turns out to be the best choice of biometric method in terms of security of data retention and purchasing process.
The basis of PayEye’s innovative solution is precisely the unique features of the iris of the eye, and it is an element that identifies the user and confirms payment.
The process of encoding and recording the iris image is fast and safe for the user. The corresponding POS device “photographs” the eye, and the software extracts the iris. Then those elements of the image that are used for user verification are digitally encoded and saved in a highly secure database that they never leave. Because we do not store eye images, there is no risk of them being stolen, and our sensitive personal data – throughout the process – remains safe.
Safe for the eye
The devices used in the payment confirmation process biometric verifying the iris of the eye illuminate the eye using infrared radiation meeting the most stringent criteria and standards. The international standard for devices emitting infrared light (IEC 60825-1) groups these devices into three classes. Only class 1 devices are safe for the eyes. Those used to identify the person making the payment using the iris meet all required standards. Do you want to use it? Check out. Sign up and enjoy your life!
What affects consumer behaviour
A beloved beautician or hairdresser is quitting their job. What are you doing? Are you giving up and looking for a new expert, are you going to travel across town, because only she or he will do their job best?
A car mechanic who, since you have a driver’s license, has taken care of every car you own, suddenly moves abroad. Are you asking him to recommend a trusted mate, or are you switching to a bike?
You get married, your first child is born. Do you still spend a fortune on drinks when you go out on Friday, or make your purchasing decisions change drastically?
What else determines our behaviours and decisions, including our purchasing decisions?
Anthropologist Paul Atkinson, based on his research, claims that:
“Consumer behaviour is often the result of unconscious motives that can be decoded by psychological and anthropological techniques”.
Our behaviour is shaped by our personality, age, education, culture, the need for self-fulfilment, as well as experience and – mentioned by behaviourists as a key factor – our environment.
Behaviourism is mainly associated with working with dogs. But the same factors that work on our pets, work on us. In a behavioural approach, it is the environment that is considered to be the key factor influencing – and some even claim controlling – the behaviour of organisms.
The creator of behaviourism, Professor John Watson of Johns Hopkins University in Baltimore, clearly stated:
“Give me a dozen healthy infants, well-formed, and my own specified world to bring them up in and I’ll guarantee to take any one at random and train him to become any type of specialist I might select — doctor, lawyer, artist, merchant-chief and, yes, even beggar-man and thief”.
Current strong impact trends
The ever-changing environment affects people with varying degrees of intensity, and recently it has had an impact in several key areas: safety, ecology, convenience, and – although we are one global village –, the locality.
We care more and more about our security – both the data we store on computers or phones and ourselves. Recent events that have affected the entire globe have changed (and continue to change) our existing consumer behaviour, including in the area of payments. Already today we can see a downward trend with the use of cash for contactless payments. What happens next? We will certainly see the shaping of a new reality.
The ecological trend, which has been going on for several years, is becoming increasingly larger. It is most visible in two sectors: cosmetics and food. The number of companies preparing eco-products in Poland in 2019 increased by 12.8%. And Poland in the region of Central and Eastern Europe has the most land in conversion to organic farming – 108.6 thousand ha. According to Polaków portfel własny: kochamy okazje (Poles’ wallet: we love bargains) report prepared for Santander Consumer Bank, as early as in 2018, one in five Polish women declared that they were trying to buy goods of natural origin (about 17% of the total number of Poles). Today, it is simply necessary to have at least some eco-products on offer.
We want the simplest, most everyday activities to be as short and simple as possible and we – humans – don’t want to adjust the car seat and mirrors every time our wife uses our car; we want to know what the weather is going to be like in the place we’re going in a week’s time in a split second; we don’t have to measure our heart rate and distance by hand while running.
Comfort has come to our daily lives for good. We buy, we order, we also pay in real time. We often even expect an immediate payment transaction, delivery of goods or order processing in the shop. According to Dr Przemysław Barbrich of the Polish Bank Association:
“The largest number of supporters of instant transfers is among Generation Z, i.e. those born after 2000, and 42% of this age group believe that instant transfers should be the standard”.
As being loyal customers of global brands, we can notice and more and more often appreciate ideas and products created right next to us, food products “from a neighbourhood”, handicrafts made by friends, hand made clothing, and an Easter cake baked by an artisan confectioner.
We want to know, and it becomes important to us – who prepared the food for us and from what products, who packed our gift book at Empik and where the food comes from for our birthday party. Today, not only our grandmothers but all generations will be happy to eat tasty and healthy food. More and more consciously.
The environment affects both individuals, and individuals strongly influence the formation of social groups. We, Poles, are such a social group in terms of payment behaviour. We are one of the most open societies to new forms of payment. We are looking for the most convenient and fast payment methods. The survey entitled Płatności bezgotówkowe oczami Polaków 2019 (Non-cash payments in the eyes of Poles 2019) prepared by KIR shows that 20% of respondents declared payment in cash. This method is most often chosen by people between 35 and 54 years of age. 66% of those surveyed declared payments with the payment card, the largest part of them being over 55 years of age. Phone payments are the most popular among young people (18-34 years old) – 23% of all those using phone, watch or other devices.
„Soon, not only cash payments but even card payments may be a thing of the past”4
This is the main conclusion of the EY survey conducted with representatives of financial institutions, regulators, technology providers and experts from around the world at Sibos (https://www.sibos.com). What is to replace it? 59% of those surveyed expect mobile devices and wearable devices (watches, bracelets or glasses) to dominate the payments market in the next ten years. One-third of those surveyed expect payments to be made using biometric tools in 2030. Only 4% of the respondents indicated that the payment cards would remain in use. Cash was not mentioned by the respondents.
Not only such a specialised group of people focuses on new ways of payment and is prepared for them, or even expects it.
As many as 47% of survey participants surveyed by Mastercard in mid-2019 declared their willingness and readiness to use biometric methods as a form of transaction authentication. They consider biometric forms to be safe, each one – fingerprint, facial features recognition or other types of biometrics – has positive feedback from a group of over 50%.
We can be tempted to say that a large part of us are ready for new forms of payment. Ideally, these forms should meet all our requirements, i.e. be even safer, more comfortable and faster. In such a case, paying with one look – offered by the Wrocław company PayEye – i.e.. confirmation of payment without using unnecessary accessories becomes a perfect solution.
A mobile, on-line… PayEye time!
Payment evolution – the history of payment
HUMAN BEING – an exceptional creature with the ability to think abstractly…
A human being is an exceptional creature in many dimensions. One of these dimensions is the ability to think abstractly, which can be illustrated by the concept of money. Money is valuable only because everyone knows that everyone will accept it as a form of payment , and this is a global phenomenon. So let’s look at where the concept of money appeared, how it evolved, how money is used today, and finally, how the payments of the future may look like..
MONEY – a fix idea accepted by mankind…
People have engaged in trade and exchanged goods and services for a fee over the centuries. These transactions (today called financial transactions) did not always involve cash payments. There was a time when standard money didn’t even exist, and people used other forms of payment to make transactions. Money, as we understand it today, has been with humanity for over 3,000 years…
At first, the easiest and at the same time, the most intuitive way to make a transaction was to exchange a good or service for another good or service.
Since ancient times, barter – because that is the name of this transaction model – has been a beneficial way of exchanging goods and services. A system perfect at that time enabled both parties to get what they needed. In addition to silk, incense, spices and other artefacts desired in the region, livestock was considered to be a wealth that could be accumulated. Already in the oldest piece of Greek and European literature, the Iliad poem, written during the 8th or 7th century BC, Homer, following his well-known payment system, determined the value of the armour as equivalent to nine oxen.
The system based on exchange for grain, which was treated as money in agricultural countries, was more sophisticated. The grain is relatively light and regular. Using these advantages, the grain was measured by adding or removing the grain depending on the estimated value of a given good or service. During this archaic period, the value of various goods was expressed in grain equivalents… almost like the Big-Mac Index®…
Apart from grain, another frequently used payment commodity with similar characteristics to grain was salt. Poland was one of the countries where it was used as a means of payment for a very long time. In addition to making sales, salt could be used to bail out of oppression and trouble under the law (the courts of that time, as one of their penalties, imposed a fee of 300 crumbs of salt, from the accused). The transactional significance of salt in Poland has been transferred to modern times through semantics. To this day, the following words are used in Polish: “to pay salty for something” which means to pay dearly for something.
Temptation – the clink of coins and the glitter of precious metals…
Value. Mathematically, it is an abstract concept and is used in this way for money.
At the beginning, though, more jewellery artefacts were used, which were very valuable to humanity at that time. Ancient civilisations (for example, Aztec culture) used beads and shells as coins. Around 770 BC the Chinese moved from using real tools and weapons as a means of exchange to using miniature replicas of the same tools cast in bronze. However, these objects were not the most comfortable (they stabbed and injured the hands), so over time these small daggers, pikes and hoes were abandoned for the less spiky shape of a circle, which became one of the first coins.
China was the first country to use recognisable coins. These were round coins with a square hole in the middle. It was introduced in 221 BC by Emperor Qin Shi Huang. Coins were minted in China according to a similar design until 1912. It can be said that and in the case of money – a good thing devalues for a long time…
Historically – chronologically – the first minted coins were made in Lydia (now western Turkey). In this case, precious metals – gold and silver – were used to make coins. This currency was both valuable and easy to carry. According to Britannica, in the streets of Sardes (Ancient Greek: Σάρδεις), the capital of Lydia, around 600 BC, a clay pitcher could cost two owls and one snake.
The currency of Lydia helped the country increase both internal and external trade, making it one of the richest empires in Asia Minor. Interestingly, when someone says “as rich as Croesus”, they mean the last Lydian king who minted the first gold coin.
Unfortunately, the minting of the first coins and the development of a strong trade economy did not protect Lydia from the sword of the Persian army, but this is a completely different story…
Let’s keep track of the evolution of money.
From leather goods to paper…
Leather was another material used to make currency. In ancient China, people used white deerskin as a banknote. Interestingly, due to the size of the records (bills) at that time, this leather money could be as big as sheets of deer leather (about 1 m2).
It should be noted that it was the Chinese who significantly influenced the evolution of money, also switching from coins to paper money. As Professor H. U. Voge stresses (an eminent researcher of Chinese history and society), until Marco Polo’s visit in 1271 AD, the Emperor of China had constant control over both the money supply and various denominations. He used many elements and channels to control the process, e.g., in place of the statements strongly emphasised on American banknotes: “In God We Trust” – the Chinese writing warned: „Those who counterfeit will be beheaded”…
However, Europeans used coins until the 16th century. In order to be able to mint more and more coins, the import of precious metals from the colonies was encouraged.
However, banks started to use special notes for depositors and borrowers at some point. This was necessary because of the weight of these “noble” coins – the equivalent value of goods and services. These innovative banknotes for those times could be taken to the bank at any time and exchanged for their denominations in silver or gold coins. This paper money could still be used to buy goods and functioned similarly to today’s currencies, but it was issued by banks and private institutions and not by the government, which is now responsible for “printing” the currency in most countries.
What is worth emphasising is that the first paper currency issued by European governments was in fact issued by colonial governments in North America.
As deliveries between Europe and the colonies took so long and growing in intensity, there was a cash shortage as these transactions developed. Instead of returning to the barter trade system, colonial governments used an innovative contractual formula: I owe you, which has been traded as currency. As we read in a document prepared by the Canadian Bank, the first recorded place of use of this formula, or more precisely its abbreviation – “IOU” – was Canada, and then the French colonies. According to records, in 1685, soldiers were issued with playing cards, specially marked and signed by the governor, to be used as a cash substitute (coins from France).
The power of gold…
Although gold has had a power of attraction since ancient times, and as an object of desire it was also often used as a means of payment, England was the first to set gold as its standard of value in 1816. It was only after this event that Europe began to support (balance) banknotes with the so-called “a gold standard”. This meant that the value of each currency had to be determined as the value in gold. The United States of America began to introduce this standard only in 1900. Until then, both gold and silver were used interchangeably with dollars. In 1913, the US dollar was secured with gold. The Federal Reserve System was established – this official central bank served the financial interests of the nation. At that time, the Federal Reserve banknotes were secured with gold. One of the roles of the Federal Reserve was to ensure that banknotes and cheques were honoured and could be exchanged for gold.
In 1933, however, the United States stopped using the gold standard to stop Americans from cashing in their currency for gold, reducing domestic gold supply in the face of worsening deflation. Since then, the federal government has become an official supporter of the monetary system instead of gold…
And, as many economists have pointed out, in the utopian world, the currency would always be perfectly stable in value!
The market economy is organised according to prices, profit margins, return on capital and interest rates. Changes in the value of the currency disturb this process, causing chaos and havoc. In 1923 John Maynard Keynes, an English economist and creator of the theory of state interventionism, whose theories significantly influenced micro and macroeconomic development, wrote:
“[Markets] cannot work properly if the money, which is treated as a stable measurement value, is unreliable”.
According to Keynes, unemployment, insecure employment, the disappointment caused by excessive waiting, sudden loss of savings and speculation – all this is largely due to the volatility of the value standard.
According to Forbes magazine, in 1971, the economist Arthur Laffer – then Chief Economist at the US Office of Management and Budget – was asked what, in his opinion, were the consequences of “closing the golden window” by Nixon, which effectively ended the Bretton Woods period when the dollar was set at USD 35 per ounce of gold.
Laffer was supposed to say: “being an American is not going to be so pleasant anymore”..
More convenient shopping with a deferred payment – IOU – I owe you… and I’ll pay you back later…
Consumers started using credit from retailers in the 20th century. Some retailers (such as department stores and petrol stations) started to create individual credit cards that were issued to consumers. These cards were created to make spending money more convenient for people. The Diners Club Card was the first actual credit card to give consumers the opportunity to buy meals in several restaurants in New York City, and to spread globally over time.
As it happens in the case of solutions that were created with the convenience of a given group of recipients in mind, seeing the benefit of this solution, other organisations (including banks) have adopted this form, and the credit card (payment card) has become a popular means of making purchase and sale transactions.
Internet – the communication revolution and its impact on the payment system…
As the Internet developed and expanded in the 1990s, opportunities for on-line shopping emerged.
A phenomenon involving consumers taking advantage of the possibility of browsing through the websites of many shops, comparing them and making purchases has been called the e-commerce market. According to analyses, Pizza Hut was one of the first retailers to complete an e-commerce transaction. This company (a chain of restaurants owned by American Restaurants) enabled its customers to order pizza through its website as early as 1994.
However, ordering is only part of the purchasing process. At a later stage, banks introduced virtual transfers (via the Internet), and then it was the turn for mobile payments…
Mobility – the freedom of modern times…
The year 1997 is assumed to be the date of the first payment transaction using a mobile solution. Beverage retailer – iconic and timeless (certainly because it always follows the spirit of the times), the Coca-Cola brand has created special vending machines that have enabled consumers to pay for drinks by sending text messages from mobile devices.
Since then, the number of mobile payments has increased sharply. Now more people than ever before pay from anywhere, and more merchants can accept payments anywhere without being tied to a cash register.
As technology has evolved, money and payments have changed drastically. Current credit card processing technology and advanced business solutions make financial transactions possible almost anytime and anywhere.
A coin avatar – electronic money…
It can be said that nowadays, electronic money is a natural stage in the evolution of means of payment.
Although the novelty of electronic money is only technical, nevertheless, in 2008 the world was dazzled!
Bitcoin – this is the reason why it’s considered the most important crypto-money in the world, but there are still many secrets associated with its creation. According to BusinessInsider, the domain name bitcoin.org was registered in August 2008. Two months later, an article entitled Bitcoin: Peer-to-Peer electronic cash system was spread on the web via e-mail. In this article, like the name of Jeanine Salla in AI. Artificial Intelligence by Steven Spielberg, there appears a mysterious character – Satoshi Nakamoto, which permanently links this name to the crypto-money.
As a digital currency it is called a cryptocurrency, which functions as a means of exchange using cryptography to secure financial transactions, control the creation of bitcoins, and verify money transfers.
Bitcoin (BTC) is based on an open-source system – there is no single owner, and everyone can actively participate in its use and development. The system, therefore, eliminates at least one intermediary – banking institutions.
This cryptocurrency is created by computers that take part in managing the public register (public databases). Computers verify and approve bitcoin transactions, and for each “block” added to the blockchain (each transaction in this network is saved in the blockchain) they receive new bitcoins. This process is called “digging” and computers are equivalent to “miners”.
Government institutions and banks basically generate new money endlessly (euros, dollars, pounds, etc.), while Bitcoin emissions are limited to 21 million coins.Currently, about 17.5 million have been mined, while the last Bitcoin will be mined around 2140. One Bitcoin is divided into eight decimal places, and its smallest unit is unofficially called Satoshi, and it is 0.00000001.
Researchers, including Andrea V.Vlasov, on the subject of cryptocurrency, stress that it can be said that the evolution of electronic money has led to the fact that the cryptocurrency now has a significant advantage over other forms of money.
Money itself is nothing valuable… It can be a shell, a metal coin or a piece of paper with a historical image. The value people put on it has nothing to do with the physical value of money.
Money draws its value, being a means of exchange, a unit of measurement and a storehouse of wealth. Money allows people to trade goods and services indirectly, to understand the price of goods and to save on larger purchases in the future…
Money changed its form because the human being, striving for perfection, was looking for a more convenient, safer and faster form of payment. Today we can use the combination of virtual money and innovative use of the iris of the eye as a very secure form of confirming transactions. PayEye – one look is enough.