From Early E-Commerce to current days : The Evolution of Online Payment codes

Quick read : From the early days of dial-up internet to the instant world of cryptocurrency, the online payment voucher has undergone a remarkable evolution. Born from the need to build trust in e-commerce, these prepaid codes started as single-brand solutions, mimicking physical gift cards and phone top-ups. The real breakthrough came with open-loop vouchers, which acted like virtual credit cards and allowed anyone with cash to shop online. Even as e-Vouchers are nowadays specialized to fuel digital ecosystems like gaming and music, they also adapted to become gateways for buying crypto, reload prepaid cards, and their core appeal remains: offering a flexible, private bridge between cash and the digital economy. This is the story of how a simple payment hack became a fixture of our financial lives.

How did it all start ?

Ever wondered how we got from inputting a Prepaid mobile phone topup value code from a recharge ticket to using a transaction code to instantly pay online ?

The story of open-loop e-money vouchers, those prepaid codes you buy in a shop and use online as a payment method similar to using a card number, is a bit like the story of the internet itself: a steady climb from suspicion and clunkiness to something that just works, and the keyword in this technology is “transaction code”, or referred to as prepaid code, e-voucher or pin-code in daily life.

Let’s walk through how this payment method went from a quirky workaround to a fixture of the digital economy.

Phase 1: The Birth of the Idea (Mid 1990 - Early 2000)

Back when e-commerce was mostly a novelty and internet access was done via dial-up modems, ordering and paying anything online felt risky. Shoppers hesitated to hand over their credit card info, and few trusted the new world of internet shopping. So, what did companies do ? They looked at something people already used and trusted :

• Gift cards—the kind you could use only at one store - started being available in physical shops to attract new customers, who would gift these value cards as a present or receive them as a purchase promotion.

• Prepaid phone cards : as mobile phones became increasingly popular in the mod-nineties, people were used to exchanging cash for a code that unlocked minutes or call value on their mobile phone.

But everything was limited. Codes were tied to a single brand, and you couldn’t use them just anywhere. These are the so-called Closed-Loop Vouchers. Soon payment technology companies would create a way to use this concept to pay online.

Phase 2: Open-Loop Vouchers Take Off (Mid 2000s – Early 2010s)

The real breakthrough came when payment system operators realized they could turn the closed-loop voucher technology into an Open-Loop Voucher technology, where a customer could buy and use an open-loop code card anywhere this open-loop voucher was accepted online. Suddenly, anyone, even people without a bank account, could shop online, simply by buying with cash a code of a certain value in a shop, and use that code as a virtual credit card number online to execute an online payment : the birth of Online spending without the use of a bank card !

Europe was certainly a pioneer and led the development of online prepaid payment codes, driven by its heavy use of cash and fragmented online payment options. Paysafecard (now Paysafe), founded in Austria in 2000, was the first to scale this model - selling prepaid vouchers for cash that could be redeemed online as payment on websites. Ukash, a UK-based rival launched in 2005, with a similar approach but offering variable voucher amounts, was later absorbed into Paysafe via Skrill, consolidating the market. PayPal also entered this space with "My Cash" cards, letting users fund PayPal accounts with in-store purchased codes, using prepaid as a way to attract customers without credit or debit cards. These different prepaid vouchers clearly filled a need, especially for the unbanked, or parents wanting to control their kids’ spending, and anyone nervous about sharing personal financial information online.

The U.S. prepaid card market developed in the late 2000’s with a strong emphasis on general-purpose reloadable (GPR) cards, often expanding from existing card products. Major card networks like Visa and Mastercard enabled this market by creating BIN Sponsor programs, allowing companies such as Green Dot to issue cards and codes on their networks. Green Dot became a central infrastructure provider, powering many retail gift cards (like Vanilla Visa), though it was not a direct consumer-facing brand. Additionally, the U.S. saw significant growth in prepaid codes geared toward online gaming, with companies like PlaySpan enabling game-specific payment solutions for platforms such as PlayStation, Xbox, and Steam.

In Asia Meanwhile, The Asian payments market evolved differently than in the West, skipping much of the card-based code phase and moving quickly to mobile and digital wallets. In 1997 BitCash (nothing to do with crypto coins) saw the light in Japan, and companies like MOL Global enabled users to buy prepaid PINs at retail outlets (e.g., 7-Eleven) all over south-East Asia, to top up digital wallets or pay for online games, similar to Paysafecard’s model. In China, the market shifted early to UnionPay prepaid cards, but super-apps like Alipay and WeChat Pay, integrating wallet and payment functions, quickly made standalone prepaid code systems obsolete.

Phase 3: Specialization and Going Digital (Mid to late 2010s)

As smartphones took over and digital stores exploded, the voucher business got more specialized. Suddenly, you can buy codes for everything: iTunes, Google Play, Xbox, Spotify, and dozens of other platforms. Physical prepay cards are still available in shops, but digital delivery started to creep in—buy a code online, get it by email or text, and spend it instantly.

Phase 4: The Modern Era—Speed, Integration, and Crypto (2020s – Present)

Today, the basic idea persists, but it’s been swept up in a digital wave. You can buy a code online and have it delivered to your inbox in seconds, or pick up a physical voucher at a gas station and use it to buy Crypto.

The latest development in e-voucher strangely enough returns to closed-loop payments, when we can even accelerate the process further : Instead of buying a payment code in a shop or online to pay at any of the affiliated websites to this payment code the online merchant simply provides the customer with an activation code or QR-code, which the customer then pays online with his card or can even pay in a shop, with immediate payment notified to the merchant : that’s the speed advantage of closed-loop systems.

The open-loop e-money voucher started as an answer to “how do I buy online if I don’t trust or have a credit card?” Over the years, it’s grown into a bridge connecting cash to everything digital: shopping, gaming, music, even cryptocurrency.

In a landscape that keeps getting faster and more integrated, these vouchers have survived by offering something few other payment methods can: true flexibility, privacy, and a foot in both worlds.