The History of the Financial Technology Sector

David E. MickeyAt the most recent developer conference held by technology giant Apple in San Francisco, a presentation on Apple Pay caught the attention of many participants.

Apple is hardly the only tech giant trying to get a foot in the door of the financial technology sector, more commonly known as fintech. Amazon and Google have also taken their respective turns developing electronic payment solutions, and Microsoft has shown interest in the blockchain aspect of the controversial digital currency bitcoin.

Fintech may be getting all the attention these days, but the history of financial technology dates back to the 19th century.

The Early Days of Financial Technology

Tech historians often cite couriers and the telegraph as the earliest beginnings of the fintech as we know it these days. The Western Union Telegraph Company had an interesting system of debt instruments that combined Morse code with couriers delivering cash to make wire transfers in the middle of the 19th century.

In the 1870s, the Gold and Stock Telegraph Company also used Morse code and human clerks to deliver quotations; those clerks would eventually lose their jobs when thousands of stock ticker machines were installed at Wall Street offices and across the United States.

By the 1960s, stock ticker machines were replaced with computers that introduced a new era of stock market data delivery and processing systems.

The Elimination of Cash

Credit cards have been around since the 1950s and the first automated teller machine (ATM) networks were installed in the late 1960s; however, it would take decades before the major payment networks such as Visa and MasterCard would offer debit card solutions.

Electronic Stock Exchanges

The year 1972 was momentous for the financial tech sector as the National Association of Securities Dealers Automated Quotations (NASDAQ) started operating a stock market that rivaled the New York Stock Exchange. This electronic exchange system would later be adopted by financial markets around the world.

The World Wide Web

Prior to the introduction of the first graphical web browser, dedicated systems such as Bloomberg Terminals combined information with trade execution. Some of this functionality was ported to online networks such as CompuServe and America Online, but once the web came of age in the 1990s, retail stock brokerages quickly found a new home.

E-commerce and Electronic Payments

The dawn of the web also launched early e-commerce efforts, which were eventually boosted by the advent of PayPal and many other electronic payment options. Online banking was somewhat of a late arrival in the financial tech revolution; in fact, early online bill payment services were not made by electronic transfer but rather by means of bank clerks writing checks on behalf of account holders and putting them in the mail.

Mobile Wallets

By virtue of falling behind the financial tech curve, banks have seen their market share reduced by mobile wallets, which feature a combination of smartphone technologies and prepaid services that are more dynamic than a checking account. Apple Pay is one type of mobile wallet. Digital currencies such as bitcoin also offer online wallet functionality, and this seems to be the next step in financial tech.


David E. Mickey is a financial executive based in Buffalo, New York, and he’s an Enterprise Sales Executive at Docupace Technologies. Please visit his websites to learn more: http://davidemickey.com; http://davidemickey.net/; and http://davidemickey.org/.