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Carlos Aguilar
Bette Petrides
English 101
Dec 13, 15, 23:14 A12/P12

New Monetary Technologies

Today, it is very common to own credit cards and make digital transactions even from
your cell phone. However, this has not always been the case. Money has evolved just like
anything else in the world. It has progressed through many stages until it finally took the form it
has today. Money is imperative in our everyday lives; it is a necessity. New monetary
technologies have impacted our lives in ways we could not even imagine. Thus, monetary
technologies developed in the Consumer and Global Eras have shaped the world in which we
live today a world immensely connected through technology, and dependent on digital
transactions.
Money is any item that is accepted to pay for goods and services. Money has three roles
which are serving as a store of value, a unit of account, and a medium of exchange. Money had
always been around; however, it took different forms and shapes. A Long time ago, civilizations
used to barter goods for other goods or services, but since bartering did not embrace the three
basic roles of money, bartering later disappeared. Paper money was first created in the 13th
century in China by the Chinese emperor Kublai Khan (James, 2012). He made paper money the
dominant form of currency. He recognized that what matters most about money is whether
people believe in it enough to use it. By the 16th century in Europe, money still remained a
tangible object; however, its value was represented in gold and silver coins. In this period, the

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amount of money in the economy depended on the availability of these scarce resources. Later,
during the American Revolutionary War the Continental Congress printed Continentals to pay
for the countrys war debts. These bills were backed by gold, but since too many of these bills
were issued, their collective value exceeded the amount of gold. Later, in 1862, during the Civil
War, Congress passed a law that allowed the government to print as much paper money as
needed. On the other side of the Atlantic, the Bank of England took a different approach and
decided to adhere to the gold standard while promising to exchange its notes for gold upon
request. Paper money backed by gold brought stability to the economy. Nevertheless, the gold
standard came to an end after WWI. This occurred because governments needed more money for
their militaries, so they simply began to print money and then noticed that all the money printed
could not be backed by gold due to its limited quantity. Now, the dominant currency that flows in
our economy is called fiat currency, which is backed by the American government and
peoples belief. Other than that, fiat currency is just a worthless piece of paper.

All these information mentioned is very valuable, but perhaps is not as valuable as messages
conveyed through money. Money conveys political and cultural messages. The exhibit at the
American History museum displays a wide variety of unique international and national coins that
had been collected from money collectors. At this exhibit there is a rare $5000 bill found that
was issued at the time of the Great Depression. The purpose of messages conveyed through
money are made to relate to people and create value and confidence in the currency.
Furthermore, money also conveys cultural messages through symbols that relate to the identity of
a culture. For example, at the Value of Money exhibit there is an American coin which has the
head of an eagle traced on a coin. Eagle has long been identified by the American people as a

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symbol of freedom and has been used traced on American currency to emphasize that America is
a nation of freedom and again create confidence on the currency used by U.S. citizens. Although
this message might not be directly conveyed, people are somehow affected by the message
money carries and are prompted to rely on it.

Technologies have impacted the evolution of money and this has had a strong impact on
the Consumer Era, which took place from the 1940s until the 1970s, when production boomed
and the American enterprise shaped the market. During this stage, consumption was even
painted as a patriotic duty (Alan, 1993). The main cause of such movement was the return of
soldiers from WWII. The result of war created confidence in the market and this drove Americas
economy to prosperity. Throughout this stage, families consumed a lot due to the newly acquired
plastic money, which was first created in 1950 by the Diners Club in New York. This was
considered the first major travel and entertainment card. The Diners Club card allowed its
members to eat at many restaurants, but its major benefit was that consumers could use cashless
payments. The Diners Club allowed, cardholders of this then- paper card [to] charge meals with
payment due in full monthly (Federal Reserve Bank of ST. Louis). Many credit card companies
joined the market, but in 1959 the Bank of America introduced the first charge card called
BankAmericard, now known as American Express. Cardholders could then, make monthly
payments toward the total, with interest applied to the remaining balance(Federal Reserve Bank
of ST. Louis). BankAmericard allowed consumers to pay for goods and services from a single
account, unlike the Diners Club paper card.

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Diners' Club Credit Card, 1955 (Source: American History Museum)

The introduction of these cards impacted the people in a myriad of ways, but mainly encouraged
consumers to buy more goods due to the easiness of transactions through cashless methods of
payment. Although many enjoyed the benefits of this new trend of easy money, some questioned
its outcome. For example, Richard Rutter, a New York Times writer, revealed his worry on this
matter but also his desire to educate people on [t]he Great American charge it or credit card
phenomenon. Rutter questioned the benefits of this, so he interviewed one of the main issuers to
gain further in-depth information. When he asked the Diners Club about the requirement to
obtain a card they said, there are no specific qualifications for membership [and that] the main
requirement is stability(qtd. in Richard, 1965). This shows that drawbacks may have arisen due
to soft regulation of credit, but it also tells that consumers were drawn to the need of owning a
credit card for their convenience. This new monetary technology allowed card holders [to] treat
friends to a dinner almost anywhere in the world(Richard, 1965) which used to be an

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unthinkable thing to do before. This shows how the Diners Club card impacted the people and
the market during the Consumer Era.
Cashless payments are the main method of payments in the Global Era. However, this
change of eras would have not been possible if new monetary technologies had not been
developed. The Global Era is a more interconnected reality. It creates more opportunities for the
people and the market, but it also contributes to uncertainties. This era began in the 1970s and
continues until now. The Global Era is characterized by the development of innovation and the
increased dependency of society on technology, which leads us to todays digital based
transactions. In this era, the use of credit cards impacted people, but innovation is what drove
consumerism. Credit card issuers have become aware that a great way to promote spending is by
improving innovation on credit cards themselves. Measures have been taken to lower fraudulent
acts regarding credit cards. The development of new secure technology on credit cards, is
designed to increase consumer confidence on plastic money and boost spending. Consumers
have long been using credit cards with a magnetic stripe. The magnetic stripe technology was the
best innovation produced on credit cards until hackers started to find ways to decode credit cards
for fraudulent purposes. Credit card companies realized that change needed to be made. The
EMV, which stands for Europay, MasterCard and Visa, have developed the EMV chip
technology. These chips, make it harder for hackers to make a counterfeit copy of your credit
card if they steal your account information. The chips generate a unique code for every
transaction so if fraudsters steal data from a retailer, they won't be able to use that information to
make future purchases (Matt, 2014). The technology implemented on these credit cards is meant
to boost the nations economy. Nevertheless, due to the newly implementation of this technology,
the adverse reaction has occurred. According to an article written on the Washington Post, chip

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technology [is] already leading to headaches for companies that rely on working cards to charge
their customers every month (Joseph, 2015). The main cause of this occurs when customers
dont update their accounts after receiving a new card. Its always been a hassle, but with
millions of cards carrying the new chip technology being mailed out all at once its creating
bigger problems. (Joseph, 2015). Even though this new technology is not getting positive
feedback from businesses, it will impact consumers by making them more confident of their
banking account and as a result spending will soar again and make up for the businesses loss.
EMV chips will support the cashless businesses and hard cash will fall behind even more and the
marketplace in our era will move even further toward cashless payments.

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(Source: New technology in credit cards leads to headaches for some, Washington Post)

In sum, new monetary technologies impacted consumers through the Consumer and
Global Era by making the money process more efficient. Thus, this had a pebble effect on the
nations prosperity. Eventually, money will keep evolving and take different forms. There is no
way of finding out what awaits our society; however, I hope that whatever this is it would be
beneficial rather than threatening to the well-being of society.

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Works Cited

"Cards, Cards and More Cards: The Evolution to Prepaid Cards." Federal Reserve Bank of St.
Louis. Web. 28 Oct. 2015.
"Charge It." National Museum of American History. 18 June 2015. Web. 28 Oct. 2015.
Durning, Alan Thein. "American Excess." E Magazine. Jan./Feb. 1993: 26-35. SIRS Issues Re
searcher. Web. 27 Oct. 2015.
Gosselin, Kenneth R., and Matthew Kauffman. "A Credit Trap for Consumers." Hartford Courant
(Hartford, CT). 11 May 2003: n.p. SIRS Issues Researcher. Web. 27 Oct. 2015.
Knight, Elizabeth. "Impact of New Monetary Technologies on Consumer and Global Era."
Personal interview. 18 Oct. 2015.
New, Catherine. "Cash Dying As Credit Card Payments Predicted To Grow In Volume: Report."
Huffington Post, Money sec. HuffPost Business. Web. 28 Oct. 2015.
Pisani, Joseph. "New Technology in Credit Cards Leads to Headaches for Some." Washington
Post 15 Oct. 2015, Technology sec. Washington Post. Web. 28 Oct. 2015.
RICHARD R. "Personal Finance: The Era of the Credit Card." New York Times (1923-Current
file): 38. Feb 08 1965. ProQuest. Web. 27 Oct. 2015 .
Schulz, Matt. "The Unfortunate Truth About Your New Chip Credit Card." Huffington Post 9
July 2014, U.S. ed., Business Money sec. Web.
Surowiecki, James. "A Brief History of Money." IEEE Spectrum. 30 May 2012. Web. 28 Oct.
2015.