The history of money transfers: from the 8th century to the present day.
Material is prepared with the support of Samsung Pay
Urgent money transfers are perceived as something ordinary thanks to mobile banking and online payment services. But the need to send money appeared much earlier than Internet technology.
At TJ – a story about how the world’s first money transfers appeared, and how the technology of money transfer has become convenient and fast with time.
Chinese “flying money”
It is believed that the first analogue of remittances appeared in China in the late 8th – early 9th centuries, during the reign of the Tang dynasty. Emperor Li Yuan and his son Li Shimin were progressive politicians: agriculture and trade flourished in the country. China has established economic ties with Japan, Korea and Persia.
It turned out that transporting large sums for long distances is inconvenient and unsafe. Moreover, paper money was not yet in circulation, and it was necessary to travel with sacks filled with copper coins. This problem was especially acute in the southern regions of China, where tea was grown to sell it in the north, in the capital Chang’an province. It was a successful business, and traders from the south had to carry a large revenue home across the country.
The problem of transporting money was not only for traders. The authorities of the Chinese provinces were supposed to send tax revenues to the capital. Especially for this they built in the capital of the farmstead – the Dajian.
When money and valuables arrived from the provinces, they were stored in the Dajian, in order to make it to the finance department at the right time. It was on these farmsteads that there appeared peculiar “money transfers”. Merchants who were in the capital, were allowed to take the revenue there. There they were issued a document called Feitsian – “flying money.” With this document, the merchants returned home and received from the provincial administration the same amount that they left in the capital. At the end of the 8th century, the Datsans renamed themselves jinjousuani – “courts for the receipt of offerings.”
Thanks to these “courts,” the provincial authorities no longer needed to send special messengers to the capital to pay taxes. The necessary amounts were collected from the money that the merchants left in the capital.
Bank branches of the Templars
In Europe, such a system appeared a little later – in the 12th century. The background was similar: people needed to travel, and it was difficult and dangerous to carry money with them.
The need for money transfers was first realized by the Knights Templar. Before them, nobody could have come to travel with large sums of money. For a long time in Europe, the church dominated the economy. All wealth belonged to either the authorities or the church ministers. Among ordinary people it was believed that money is a dangerous thing, wealth and aspiration for it is a big sin, and getting into heaven, if you are with money, is almost impossible. Probably, this ideology was promoted by the church, which it was profitable to remain the largest owner of finance.
At the beginning of the second millennium, Europe began the crusades. In 1099, the Crusaders captured Jerusalem, and people began to go on pilgrimage to the East. It was quite dangerous, and in 1120 the knights created a monastic order of the Templars – it was needed to guard the pilgrims going to unfamiliar lands.
In creating the Order, the Knights swore to extol poverty and not to strive for wealth. But it was thanks to them that the first analog of the banking system and money transfers appeared in Europe.
Knights Templars could freely cross any borders between states. In addition, they were exempt from taxes and received donations from all over Europe. Gradually, the Knights Templar became the richest European organization.
In times of crusades in wealthy families, it was customary to send sons to the “holy war” to the East – to fight against Muslims and pagans. Leaving, young people for safety left their savings to the Knights Templar – he had a solid reputation. If someone did not return from the war, his money passed to the monastic order as a donation.
The Templars used the funds coming to them as investments and gradually turned into a large economic organization that owns lands, mills and different industries.
So there was a prototype of the banking system.
The Templars had representations in all European regions, and everywhere people trusted their money. Gradually, the first traveler’s checks appeared on the territory of Europe. The Crusader knight could transfer his money to the Templar headquarters in one city or country and receive a document as a check), confirming that this person owns a certain amount, and now she is in the Order of the Knights Templar. In another city or country it was possible to present this document to the local representation of the order and get their money back. Now the knights could go on a journey light and cash cash in any place where the monastic order settled.
Checks were made from small pieces of leather. The information on them was encrypted, so only the treasurers could read it. For operations with checks, the Templars imposed a small tax.
Traveler’s Checks Cook
Until the XIV century, Europe used the banking services of the Templars. Then the order ceased to exist, and along with it, traveler’s checks. Several centuries they were not remembered. In 1841, the Englishman Thomas Cook – a famous abstainer and a fighter for a healthy lifestyle – organized the world’s first tourist trip.
Cook took like-minded people to the congress of teetotalers in the neighboring city. After this trip he began to organize others: for example, to the Holy Land and to America. In order for Cook’s clients to safely take money with them on long trips, he came up with a circular note. In England, she was assured by the bank, to whom the client trusted his money. During the trip a person could get cash in a bank of another country – for this purpose Cook specially concluded contracts with local banks in the countries where he organized trips.
Later, after the invention of the telegraph, James Fargo of American Express perfected Cook’s invention and patented it.
In the XIX century in the United States began a real “telegraphic boom.” In 1840, Samuel Morse patented a device that could instantly transmit messages at a distance. In 1844, Washington and Baltimore held the first ever telegraph line. After that, Morse began to sell licenses for his invention, and by 1851, 50 telegraph companies had already worked in the United States.
In 1851, Hyrum Sibley and Samuel Selden registered the New York and Mississippi Valley Printing Telegraph Company and began buying up telegraph companies. They decided to create a unified system of telegraph lines and become monopolists in the market. Three years later they had already four thousand offices in different states. Seven years later, the name of the company was changed to a simpler one – Western Union.
In 1871, the company began to make money transfers. It turned out that sending money through a telegraph is much more convenient than sending forms and transfer notes. The system worked in much the same way as postal orders, only without envelopes and stamps, and the information was transmitted instantly. The person brought money to one Western Union point, and the payment information came to another, where the recipient could take the money.
The idea with points in different cities was successful: in 1876, Western Union made more than 37,000 transfers for more than $ 2.5 million. The average transfer amount was approximately $ 70.
Despite the fact that the company continued to send telegrams, the main business of Western Union became money transfers. In wartime, the couriers of the company arrived in combat areas so that soldiers could receive money or, conversely, send them to their relatives. In 1944, Western Union carried out about 16 thousand transfers.
Since 2006, the company has stopped sending ordinary telegrams – this service has become unclaimed with the development of mobile communications. Nevertheless, the points of sending and receiving money are still working. Throughout the world there are more than 500 thousand.
“Post of Russia”
In 1869, two Russian post offices established a transfer of money among themselves through so-called transfer notes. One post office was in Ryazan, the other – in the village of Spas-Klepiki Meshchersky.
Ryazan Zemstvo Board allocated for this experiment two thousand rubles. For comparison: the average salary at that time was about 25 rubles, and a kilogram of potatoes could be bought for two kopecks. One thousand was kept at a Ryazan post office, the other at a post office in Spas-Klepik. The amount transferred was limited to 300 rubles. To send money, it was necessary to give them to the government or an agent of the government. In the Meshchersky Territory such an agent was Zemsky physician FP Aleksandrovsky. In exchange for money, a person received a special coupon – a transfer note, where the amount was indicated. This memorandum had to be mailed to the recipient. He opened the letter, presented a coupon at his post office and received the money.
This system operated for less than six months, and then the Postal Department banned it. But already in 1896 the State Russian Post began to send postal orders throughout the country, and since then this method of sending money has become very popular in Russia. In the USSR, postal transfers were paid for by postal stamps – they were pasted on special forms of translation. Having received such a form, the addressee could exchange it for money. In 1929, this service was paid for in cash, not by stamps.
Postal orders are still a popular service in Russia. In 2014, “Russian Post” launched an online translation service – you can send money from your account, and the recipient in another office will take them in cash. There are many ways to send money to another person without leaving home, but many residents of Russia still prefer to go to the post by habit.
Modernization of banks
Until the 19th century, it was rather inconvenient to use bank accounts: offices worked only on weekdays, and to make a purchase not for cash, it was necessary to write a check. But gradually the situation changed.
In the 50s, the world’s first bank cards appeared in the United States, and in 1967 in London – the first ever ATM. It is believed that it was invented by the Scottish engineer John Shepard-Barron. One Saturday he wanted to withdraw money from his account, but he was late and came after the bank’s closure. So he stayed without cash for the whole weekend. Frustrated, he went home and began to wonder how great it would be if there were round-the-clock vending machines in the city, where you could get cash, like chocolate bars in vending machines.
After some time, the inventor met with his acquaintance – the general manager of the bank Barclays – and told him about this idea. Soon the city had the first ATM.
With the development of globalization, more and more people began to work abroad. They needed not only to withdraw cash, but also send money. Money transfers were made not only by private customers, but also by large companies. If earlier it was possible to make transactions with the help of mail and telegraph, now it was necessary to have a more modern solution: financial operations became much more.
The banks were faced with the task of making financial transactions as secure as possible and allowing money to be transferred between any countries so that the amounts were converted into local currency. To ensure accuracy and speed, bankers decided to use the latest computer technology – computers. So there was another revolution in the money transfer market. In 1973, the World Network of Interbank Financial Communications – SWIFT. About 200 banks from 15 countries became participants of this system.
Along with the development of the Internet, new payment systems have appeared. The first online money transfer company was PayPal in 1998. To transfer money to another person through PayPal, you just had to register and enter the required bank card number. A new way of remittances has become very popular among eBay sellers: for entrepreneurs with a small turnover, it was much easier to transfer money via the Internet than to establish a trading account. By 2002, PayPal registered more than 15 million people. After this company there were others.
Today, when you need to transfer money to the other end of the world, very few people think about how to do it. Someone in the old manner continues to use postal orders, but more and more people prefer not to go anywhere and not to take their own things off.
With the help of Samsung Pay you can not only pay for purchases in the store, but also transfer money¹ to a card of any Russian bank by phone number. In this case, the recipient does not have to have a Samsung device.
What else do you need to know:
- You can confirm the payment with a fingerprint or using the iris scanner.
- You do not need to transfer your card information to third parties.
- Until December 31, 2018, money can be transferred from Mastercard to Samsung Pay cards without commission on Russian bank cards.