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

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 do I open a bank account if I'm under 18?

The good news for savvy young folks like you wanting to take charge of your finances is that there are many bank accounts available for under-18s.

For bank accounts that require you to be 18 or older, you’ll have to rope in a parent or guardian to open the account for you.

Otherwise, you can apply by yourself online or at the branch of the bank, credit union or building society that has the account you would like to open. 

If applying online, you might be asked for a form of identification. For under-18s, this could be a Medicare card you’re listed on, your birth certificate and/or your current home address.

In most cases, you can verify your identity online (at the time of applying) or at the branch afterwards.

Can I open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.

How can you cash a cheque without a bank account?

You can cash a cheque without a bank account if you visit the bank that issued the cheque. For example, if somebody sends you a cheque from Bank X (as written on the cheque) and you visit Bank X, it’s likely that Bank X will let you cash the cheque – provided the person who wrote the cheque has enough money in their account. Bank X would probably charge you a fee for the service.

Can I set up a bank account online?

Most Australia-based lenders will allow you to set up a bank account online. Requirements vary from lender to lender, but you will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary ID.

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.

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.

Do you need a bank account to sell on eBay?

You don’t need a bank account to sell on eBay. But if you don’t have a bank account, you must provide either a credit card or debit card.

Can British expats still open bank accounts?

As a British expat, you can open an Australian bank account, and you can apply for an account the same ways an Aussie would. You can even open an account online from the UK prior to relocating.

If you’re overseas, the bank you choose to open an account with may call you to provide you with our new account details beforehand. You can then have your ID verified within a branch once you’ve arrived.

And if you’re already living down under, the following list outlines the types of information required by most banks when opening an Australian bank account.

  • Australian residential address
  • Tax file number (TFN) or a TFN exemption
  • Identification (this can be your passport)

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

How do I open a new bank account?

There are a number of ways to open a new bank account – online, over the phone or in the branch. The trick is to decide what type of bank account you want beforehand.

It might sound like a simple enough task, but there are literally hundreds of bank accounts to choose from. And each offer their own banking features and benefits.

A comparison site like RateCity can help you work out what bank account product matches your needs.

Once you’ve made up your mind what you want, it’s advisable to have the following information ready for the application process.

  • A couple of forms of identification (such as driver’s licence, Medicare card, passport)
  • Tax file number
  • Residential address, contact phone number and email (though email is not essential)

How do you open a bank account in Australia?

Opening a bank account in Australia is usually a straightforward process. Some banks give you the option of opening an account online, while others require you to visit a branch.

Different bank accounts offer different features, so it’s best to compare your options to find one that suits you.

All banks require you to pass an identity check to open a bank account. Australia uses the 100-point identification system, which means you’ll need to show a number of forms of ID that, together, add up to 100 points.

Common ID types include a driver’s licence, passport, Australian visa in a foreign passport, and Australian Medicare card. You’ll find out what types of ID are accepted when you go through the sign-up process online or at a branch.

Once your account is open, you’ll be given or sent a debit card that you can use to make purchases and withdraw money from your account.

How do I transfer money from Paypal to my bank account?

Transferring cash from Paypal into your bank account is simple…if you have a Paypal account that is.

Once you’re logged into your Paypal account, the account balance will appear on your home page. Below your balance are two options:

  • Add money
  • Withdraw money

Choose option two if you want to transfer money from your Paypal account to your personal bank account.

The next screen will prompt you to either enter new bank account details or choose a bank account that’s connected to Paypal. You can always add more bank accounts to your Paypal profile.

Another way to transfer out of Paypal is by jumping to the wallet tab on the top menu, and clicking ‘transfer money’. Both options will give you the same result.