Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.

Fiat money

Since 1971, the world economy has largely run on a system of floating exchange rates, with

gold-backed currency replaced by what is called " fiat money". This is money that has no

intrinsic value and obtains its worth entirely on the basis of governmental decree. ("This piece of

paper can be used to pay debts because we say it can.") The use of fiat money obviously places a

greater responsibility on governments than they had in the days when currency had to be backed

by precious metals. Print too much of it and you end up in a right mess.

Credit cards, debit cards and cheques

Not so long ago, it was relatively difficult to open an account with one of the clearing banks, and

the Mainwaring and Wilsons who ran the institutions long catered principally to the professional

classes, discussing their affairs over a glass of Amontillado in the manager's office.

Though bounders could be relied upon to write bouncing cheques, for most of the 20th century

the possession of a current account denoted respectability. The manual working classes relied on

a little brown envelope of notes and coins at the end of the week, and remained "unbanked" until

well into the 1970s. If they wanted to send money away they relied on the postal order, now

almost extinct.

Then we all became more prosperous, the banks discovered marketing (black horses running

across the landscape) and students were being offered rail cards and book tokens (another quaint

form of money, happily still with us) just so that the bank could enjoy the mixed pleasure of

them running up enormous overdrafts.

In the 1980s, National Westminster Bank even raised eyebrows by allowing the customers the

option of "pictorial" cheque-books, featuring images of badgers and bunny rabbits. Cheque use

peaked in 1990, with 2.7 billion passing through the system; it's about one-third of that level

now, and falling.

The reason is the debit card, a sort of cheque guarantee card without the cheque. The first Switch

card transaction took place in 1988; by 1995, they had overtaken credit cards in popularity, and

cheques fell behind them in 1998. The advent of "chip and PIN" greatly reduced the scope for

fraud. Last year, each debit-card holder used their cards 166 times on average, acquiring £3,848

in "cashback" and making purchases worth £4,799.

However, British consumers were not to be constrained by such trivial considerations as how

much money they had in the bank. The launch of the Barclaycard in 1966 (and its now defunct

but long-running rival Access in 1972) was the start of "plastic" – the discovery that a small

rectangle of polyvinylchloride (always measuring 85.60 by 53.98mm) could transform your life.

Until, that is, the astronomical APR (annual percentage rate of interest) and overlenient credit

limits led to the inevitable personal mini credit crunch.

The modern British addiction to debt can be traced back precisely to the advent of the credit

card. By the 1990s, 0 per cent cards were being offered to lure customers, and those who took

advantage of the initial free offers and then transferred the balance to the next free offer when the

interest became due were known as "rate tarts".

Our "flexible friend" (as the Access card marketing line went) had a nasty habit of landing us in

economic trouble; now that he's been allowed to make the acquaintance of the "sub prime"

community in the United States and Britain, the extent of the credit card's true perniciousness is

becoming apparent. At any rate, we save less than at any time since the 1950s; the teenager of

today is far more likely to have plastic than a building society

E-money: the future of cash

We may not be that far away from a world where cash follows the cheque book into oblivion and

few transactions are conducted face to face. There are in excess of 20 billion payments of less

than £10 made every year; they could all go cashless.

E-money comes in three forms, two of them specifically creations of the internet. First, there is

the "card not present" phenomenon, where you have sufficient faith in the online retailer –

nowadays, anyone from Tesco to Amazon and lastminute.com – that you feel happy to tap your

payment card details on to a web page. You and the "shopkeeper" never actually meet, and you

never leave your home or office.

Money thus moves from being a physical commodity – a gold coin, a paper banknote or a plastic

card – to being a purely virtual commodity (though of course banks themselves have long held

your current account in virtual form, as a series of binary codes in a computer file).

Second, we have seen the growth of outfits specifically set up to facilitate payments on the web.

Perhaps the most high profile of these is Pay Pal, as featured, and trusted, on eBay. Barclays

Bank can chart its origins back to 1685, the Royal Bank of Scotland to 1727 and Lloyds to 1765;

Pay Pal dates back only to 2000, yet it now operates in 103 markets, manages more than 133

million accounts and allows customers to send, receive and hold funds in currencies from the US

dollar to the Polish zloty.

The real revolution, though, may be the abolition of cash, cheques, credit cards and debit cards

and their replacement by one single means of payment, which you just wave, possibly

nonchalantly, at the shop assistant. This is what the "contact less" card promises, so called

because you don't even have to put it into a reader to buy something.

The Barclaycard One Pulse card, for example, was launched only a month ago, with 4,000

guinea-pig customers in London. It will combine the functions of an Oyster card (Transport for

London's existing "cashless" method of prepaying for bus and Tube journeys), a Barclaycard,

and a "One Touch" contact less technology card.

This is the novel bit. It allows cardholders to make purchases of £10 or under more quickly and

conveniently with a single touch of their card against a reader instead of entering a PIN or

signature, thus reducing the need to use and carry cash. In a Bourne-style nightmare, your every

move and tiniest purchase will then be tracked by your bank and, if legislation allows,

officialdom. Thus can "they" know about your purchase of The Independent, a flapjack and day

trip to Tate Modern.

Alternatively, the SIM card in your mobile phone could be used to pay for the little things in life

(they're trying this out in South Korea). Either way, you will be being monitored. Money is what

money does, according to the old adage. And in the future, your money may even spy on you.

HISTORY OF MONEY

Barter

The first people didn't buy goods from other people with money. They used barter. Barter is the

exchange of personal possessions of value for other goods that you want. This kind of exchange

started at the beginning of humankind and is still used today. From 9,000-6,000 B.C., livestock

was often used as a unit of exchange. Later, as agriculture developed, people used crops for

barter. For example, I could ask another farmer to trade a pound of apples for a pound of

bananas.

Shells

At about 1200 B.C. in China, cowry shells became the first medium of exchange, or money. The

cowry has served as money throughout history even to the middle of this century. 

First Metal Money

China, in 1,000 B.C., produced mock cowry shells at the end of the Stone Age. They can be

thought of as the original development of metal currency. In addition, tools made of metal, like

knives and spades, were also used in China as money.  From these models, we developed today's

round coins that we use daily. The Chinese coins were usually made out of base metals, which

had holes in them so that you could put the coins together to make a chain.

Silver

At about 500 B.C., pieces of silver were the earliest coins.   Eventually in time they took the

appearance of today and were imprinted with numerous gods and emperors to mark their value.

These coins were first shown in Lydia, or Turkey, during this time, but the methods were used

over and over again, and further improved upon by the Greek, Persian, Macedonian, and Roman

empires. Not like Chinese coins, which relied on base metals, these new coins were composed

from scarce metals such as bronze, gold, and silver, which had a lot of intrinsic value.

Leather Currency

In 118 B.C., banknotes in the form of leather money were used in China. One-foot square pieces

of white deerskin edged in vivid colors were exchanged for goods. This is believed to be the

beginning of a kind of paper money.