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.

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.

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 I find my bank account number online?

Yes, you can find your bank account number by logging into your online banking and clicking on the relevant account.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. 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 identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

How can I find bank accounts in my name?

To find ‘live’ bank accounts in your name, you’ll have to ask individual lenders, which involves contacting them one by one and proving your identity each time. To find ‘unclaimed’ bank accounts (those that have been inactive for at least seven years), you can use this website.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How do you find a bank account number by name?

For privacy reasons, Australian banks won’t hand out account numbers or other details about their customers. However, if you provide a bank with a BSB and account number, they should be able to confirm if those numbers belong to one of their customers.