People have been exchanging goods and services for as long as they’ve been around. The means of exchange have not been static, however. So let’s look at how people managed to trade in the past and how the process continues to evolve dynamically.
In the past, this could often involve systems such as barter. Tribal people still may use this method, exchanging grain for sheep, for example. While this trading method was viable between neighbors, it was not convenient for larger trades at longer distances. As civilizations expanded, merchants started to use more portable vehicles to facilitate commerce.
Coins started to be used, made of precious metals. Over time this evolved into paper money. Often the paper money was backed by gold or silver. Checks later became famous as they were a way to keep paper money or coins from being stolen.
One of the issues with sending a check – is the time it takes for the physical paper to travel from one location to another. This might not have been a big deal if paying bills to local merchants. However, international transfers could take months.
And the problem wasn’t necessarily international. In countries like the United States, sending money from the East Coast to the frontier could also take longer. The invention of the telegraph changed that, as it sparked the creation of Western Union, a company still in existence and still facilitates rapid money transfers.
As modern monetary systems evolved, money transfers became even easier with the advent of credit cards, ATMs, and, in 1973, the SWIFT system. SWIFT stands for the Society for Worldwide Interbank Financial Telecommunications, a worldwide messaging network that provides transfer instructions so entities can send and receive money.
In addition to these currently used money transfer methods, we also use digital systems such as PayPal. Is there anywhere else to go with all of these systems in place?
Blockchains may be the wave of the future. Because they use distributed ledgers, every transaction step is accurately recorded. While not everyone is a fan of cryptocurrencies such as Bitcoin, they are gaining greater market penetration, and users are becoming more comfortable with them. Some nations, such as El Salvador, have decided to view Bitcoin as legal tender.
The exchange could be even more straightforward and streamlined with the tokenization of assets. Blockchains could therefore be the wave of the future.
While it’s great to consider future trends, at the same time, if you need to transfer money today, then you need to stick to what is currently viable. After all, Bitcoin and other cryptocurrencies are still in the nascent stages of use.
So, you may wonder, how to transfer money to someone else’s bank account?
There are several methods you can use:
– Directly making an online transfer bank-to-bank.
– Sending a check
– Making a peer-to-peer transfer
– Using a wire transfer
– Using a third party
– Making an email money transfer
All of these methods have advantages and disadvantages. To learn more, check out SoFi Invest’s informational article above.