lectronic payments and their role in electronic commerce.
COMMERCIAL TRANSACTIONS AND THE RISE OF CURRENCY
All commercial transactions involve an exchange of one good for either another goodùbarteringùor payment. Bartering was the most common type of transaction for many years, particularly in agriculturally-based societies and among those individuals who did not possess land or other wealth. Money emerged early in human history as a medium of exchange, however, and members of one community agreed that their money could be used to purchase goods or services from any member of that community. With international trade, however, even in ancient times, problems arose with one currency differing in value from anotherùa problem that continues to this day. Currency can also be easily stolen, and since it is primarily an anonymous form of completing a transaction, there is no easy way to prove that a particular piece of currency belongs to a particular person. Credit emerged as one way to handle large purchases as well as to make it possible to buy over time that which one might not be able to afford in the present.
Banks also emerged as both facilitators of credit and as repositories for large sums of currency. Rather than paying in currency, consumers could issue a bank draftùcheckùinstructing the bank to pay a particular person using funds that the consumer had already deposited. Checks are far easier to transport than large amounts of cash, and since they require a signature, can be more secure than cash for large transactions. In addition, they can be sent through the mail or used in person. Checks gained considerable favor as ways in which consumers chose to settle their accounts (Clark 4).
Credit cards have increasingly been used as payment for commercial transactions, as well. With credit cards, merchants accept a particular cardùVisa or MasterCard, for exampleùas payment for the good in question, then recei...