It’s true that money makes the world go round, but as we move towards a cashless society the way we pay for goods and services is constantly evolving.
The Federal Reserve Bank of San Francisco set up a paperless transfer system with the Los Angeles branch in 1972. Since then the financial world has never been the same.
By the end of the decade, instantaneous transfers of millions of dollars between banks, insurance companies and other financial institutions had become common.
Today EFT has trickled down to the individual. We get cash from ATMs anywhere in the world, we use PayPal and Transferwise to send funds, we even have contactless card technology. Here we look at just some of the ways that electronic funds transfer has changed the world.
What did we do before Amazon Prime? Believe it or not, there was a time not so long ago when online shopping (or next day delivery) didn’t exist. For the few companies that did operate a mail-order catalog, customers had to either send cold hard cash or a cheque through the post. The ease of EFT means that online shopping is now a huge industry. It is estimated that Irish people spent 5 billion euro online last year alone.
If you find it hard to keep on top of your finances now imagine what it was like a couple of decades ago. Back then you would receive a monthly bank statement in the post. If you wanted to inquire about your balance any other time you would have to either contact the bank or call into your nearest branch, which frankly, sounds like a lot of hassle. Thankfully, we can now check our careless spending online at any time…which maybe isn’t a good thing.
Electronic funds transfer has changed how charities raise money. Donors are now able to quickly send organisations money using just their phone. This has changed the way that charities market their campaigns and even canvas in the street. Earlier this year we spoke to TAP London an innovative social enterprise that is using contactless technology to make payments easier. You can read their interview here.
Ease of travel
Today more and more people are afforded the luxury of travel. Electronic funds transfer has made travel more accessible to the masses. Instead of going to a bureau de change before a big trip, tourists can now simply use an ATM in their host country to withdraw funds from their account. This is also a lot safer than carrying large sums of cash.
Fewer jobs in the banking sector
Electronic funds transfers have improved our lives in many ways but it is important to note that the development has had a knock-on effect on the banking industry. Due to the reduction in manual labour, banks around the world have been cutting their employee headcount over the past number of decades.
Read more in our ”How X Changed the World” series here.