A history of money

A history of money

Before there was money, there was bartering, which has been used for at least 300,000 years, when homo sapiens first emerged. Bartering allowed ancient humans to trade one product or service for another.

The next advance was the tally stick, an accounting system that was invented at least 30,000 years ago. Ancient humans would take a tally stick – which might be a piece of wood, a bone or a stone – and mark it to indicate a debt. This allowed people to ‘buy’ products or services on credit.

The tally stick was followed by commodity money, or money with intrinsic value (such as food, shells or minerals). For example, the Mesopotamians used barley as a currency as far back as 3000 BC. The advantage of commodity money was that it gave the owner options – they could eat the barley or spend it as money. The disadvantage was that its value wasn’t readily apparent – you had to weigh the barley and make sure it wasn’t spoiled.

Eventually, coins emerged. The earliest known coins were made in about 650 BC by Ephesus, a city-state in what is now Turkey. One of the problems with early coins is that the metal composition often differed from coin to coin, which made it hard for people to accept that they all had the same value.

This led to the emergence of standardised coins, in which the value of the coins matched the value of the metals used to make those coins. Standardised coins can be dated back to about 550 BC, when Croesus, who was king of Lydia (in modern-day Turkey) minted gold coins. Croesus put a brand (a lion and a bull) on each coin, which effectively guaranteed its value.

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The Romans are believed to have created the first bill of exchange in 352 BC. A bill of exchange involves a drawer (usually a banker) giving a written order to a drawee (the person who takes out the bill) to pass on to a payee (the person who cashes in the bill). The modern example of the bill of exchange is the cheque/check.

Banknotes are believed to have originated in China in 1023 AD. The advantage of using light paper money over heavier coins is that it made it easier for people to carry their wealth, which facilitated more and larger transactions.

These Chinese banknotes are also the first known example of fiat money, where the official value of the money bears no relation to the intrinsic value of the money. For example, a modern US banknote may have an official value of $100 yet contain only a few cents worth of paper.

Fiat money became dominant in the 20th century. Before then, countries generally used representative money, or money where the coins and notes represented something of intrinsic value. For example, the governments of America and Britain once allowed people to exchange their money for guaranteed amounts of gold.

The first credit card was released in 1958 by Bank of America. This allowed consumers to not only use a piece of plastic as currency, but also repay the debt at an indeterminate date in the future. This was an advance on the charge card, which also allowed people to buy things on credit, but obliged them to repay the entire debt by an agreed date (usually the end of the month).

Money celebrated another landmark in 1989, when DigiCash released the first digital currency (before filing for bankruptcy in 1998). Money had evolved from a tangible asset that was physically exchanged to an intangible asset that was electronically exchanged. DigiCash was also the first cryptocurrency, because it used cryptography to conceal the identities of the parties involved in the exchange.

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Learn more about bank accounts

Can the government take your money from your bank account?

There are some instances when the government can take money from your bank account. This generally occurs in situations where you have an outstanding government debt.

Before it can take money from your bank account, the government authority owed money would first need to issue a garnishee notice. 

A garnishee notice is issued by the government agency (such as Centrelink or the ATO) to a third party that holds money for you or owes you money.

To take money from your bank account, your bank would be issued with the garnishee notice requiring it to pay ‘your money’ to the requesting agency to satisfy the debt.

How can I wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

How do you transfer money from PayPal to a bank account?

Transferring money from PayPal to an Australian bank account is simple. Just follow these three steps:

  • Go to your Wallet
  • Click ‘Transfer Money’
  • Follow the instructions

The money will take three to seven business days to reach your bank account.

Once you’ve made the transfer request, it can’t be withdrawn.

Can debt collectors take money out of your bank account?

Many people find themselves struggling to cope with debt at one time or another. In these cases, a debt collector could contact you to demand payment for a debt, to explain the consequences of you failing to pay a debt, or to organise alternative payment arrangements.

If you’re contacted by a debt collector, you may be wondering what their rights are and whether they can take money out of your bank account.

Creditors cannot access money in your bank account unless a court order (also known as a ‘garnishee order’) is made to allow creditors to recover debt by taking money from your bank account or salary.

If this happens, the creditor can take money out of your bank account unless you pay the debt in full or make an alternative payment arrangement such as paying in instalments through the court.

How to transfer money to another bank account

Transferring money to another bank is often called a bank transfer, and it can be done a few different ways.

Customers generally need three pieces of information to transfer money to another bank account. Customers need the account name, BSB and account number of the account they wish to transfer money to.

One way of transferring money to another bank account is in a branch with the help of a staff member; they will often give you a receipt as well as confirmation of the transfer.

Transfers can be also made via internet banking and phone banking.

Some banks also allow customers to make transfers via partnered ATMs, especially if the account is with the same bank.

Can you deposit money into somebody else's bank account?

One of the easiest banking tasks in the world is depositing money. You can even deposit money into someone else’s bank account if you wish.

The basic information you need to deposit money into a third-party bank account is:

  • Payee’s name
  • Bank, building society or credit union (though this isn’t necessary)
  • BSB (or bank code, which is the branch identifier)
  • Account number

Including the name of the financial institution isn’t necessary – particularly with online banking – because the BSB will identify this for you.

A handy tip is to record yourself (or add a personal message) in the transaction description or reference. This will show up on the recipients account, letting them know who’s paid them the money.

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

Can foreigners open bank account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.