Why does money Evolve?


Money is many things to many people. To some people it’s “the key that opens all doors” to others it is “the root of all evil”. But can we say money is alive? After all “money grows”, money can “work for you” and haven’t we all heard “money talk”? Whichever school of thought you belong to, one thing is very clear. Money evolves.
Taking a look at money’s history it is clear that it has morphed from one shape to another to cater to the various needs of humanity. Now the key question is “why does money evolve?” To answer this question let’s take a look at specific points in money’s evolution.

The earliest concept of money started with bartering; the direct trade of goods and services. For example, a person offered to give 3 tubers of yam in exchange for pest control services. But what happened if the service provider didn’t want tubers of yam but rice or beans? There was also the problem of equating the value of the things being traded. How many tubers of yam would add up to an instance of pest control? Obviously this system was flawed, there was a clear need to increase the ease and speed of doing business.This led to the next chapter in money’s evolution: commodity money.

Commodities, such as salt and cattle, became the legal tender of the day due to their usefulness and universal acceptance.By overcoming the limitations of bartering, the commodity money system made the market for goods,other commodities and services more liquid. Despite being an improvement, this system was also flawed due to the perishable nature of these objects of exchange.

Money then evolved to more sturdy commodities such as precious metals, stones, tool and weapons. In 1,100 B.C., money evolved from using actual tools and weapons as a medium of exchange to using small replicas of the same tools cast in bronze. Over time, the tiny cutlery, spades and weapons were abandoned for the more comfortable shape of a circle, which lead to the first generation of coins. In the year 960, China led the way with paper money driven by the need to avoid the bulk and inconvenience of copper coinage in large commercial transactions.

The next major step in the evolution came in 1977 with the invention of the first smart card. This development played a key role in ushering in the wired economy, where money evolved into bits and bytes and started flowing around the world through satellite transponders and fiber-optic cables. We predict that by 2060 physical notes and coins will be eliminated

The moral of the story is that money has evolved to meet humanity’s need for more efficient payment systems. For any society to be successful there needs to be efficient flow of capital. Businesses and individuals need to be able to pay for goods and services or get paid as easily as possible.
Efficient payment systems are characterized by:

  • Timeliness – the ability of a person to spend as little time as possible to make their transactions in terms of making the payment and confirmation of receipt of payment.
  • Accessibility – the ability to access the payments system when and where required
  • Ease of use – ability to transact easily with less likelihood for errors and other complications
  • Safety and reliability – They also need to be confident that the system is secure, so that using it will not expose them to future losses as a result of information being fraudulently obtained.

Paga is a financial institution focused on tackling the problem of delivering efficient payment systems to all Nigerians – businesses or individuals (banked or unbanked). This is reflected in our mission to transform lives by delivering innovative and universal access to financial services. Using products and services as vehicles for change, our offerings include:

For Businesses

  • online payment collection via all local debit cards and Paga accounts
  • collection at any of Paga’s 6,000 plus agents nationwide
  • Bulk Cash Disbursements
  • Bulk Airtime Purchases

For Individuals

  • Bill and Merchant payments (DSTV/GOTV, StarTimes, PHCN, Jumia Dealdey etc)
  • Online airtime purchases
  • Money transfer

We are already making strong progress and our pace of growth at this stage of our development makes Paga the fastest growing payments scheme in Africa. In 2013 we grew 191% in users – a strong showing for 2nd year of operations; the momentum has continued in 2014 making Paga the clear leader in Nigeria. Our users are very active performing a range of transactions with approximately 30% of our users being active in 90 days. This translates to 15 transactions performed on Paga every minute.

Growth 2013-2014       Active User growth

People are increasingly using electronic payments as evidenced by Page’s growth. We are working hard to continue to build offerings that would simplify payments for everyone in an inclusive manner addressing the needs of every segment of the market.

For more information on our services for Businesses and Consumers click HERE

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