Medieval mercantile fairs were one of the primary inspirations for the rise of banking in Medieval Europe. Merchants, or money lenders, would issue documents that could be redeemed at other fairs in exchange for hard currency. These documents could be cashed at another fair in another country, or even far into the future at the same location. In the event of these documents being redeemed at a future date that might be subject to a rate of interest. These documents eventually evolved into bills of exchange, and even further down the line led to the rise of paper money and cheques, allowing the possibility of transferring large sums of money without worrying about hauling large amounts of gold across the country that could be susceptible to thievery. After the fall of the Roman banking system the Crusades are generally credited for causing the rebirth of Western banking. In order to finance the Crusades large sums of money were needed. In 1156 to Genoese brothers borrowed a large sum of money and agreed to reimburse the bank's agents in Constantinople one month after their arrival in the city.

These sorts of contracts became increasingly prevalent as, partially to allow the continuation of the Crusades, profits made across time differences were not seen as an infringement on laws against Usury. The Crusades also led to the rise of the Templars as medieval bankers. They took local currency, in return for a demand note, that could be redeemed at any of their castles across Europe or the Holy Land.

In time, a growth was experienced in long-distance and international trade, further increasing the need for transfer of sums of money across countries.

Possibly because they could offered the post protection, Papal banks became some of the most successful in the Western world. Civil war in Florence, the Papacy moving to Avignon and the arrest of the Knights Templar on largely trumped up charges caused chaos throughout the western banking system. Banks became a political and religious weapon, and the Lombards of northern Italy became the most successful as a result. This in turn led to a backlash against the Lombards and similar Italian enterprise bankers, leading to expulsion from Aragon, prohibition from making profit in England and imprisonment and expulsion in Flanders.

The Italians soon came to dominate merchant banking in the Mediterranean, and it was ruled legal in Florence to charge interest on loans despite traditional prohibitions on usury. The case was settled in the courts and charging interest was legalised. With the invention of the printing press and a slow rise in the use of paper money the banking system in the 1400s began to move steadily towards the system that we know today.

Nowadays interest taking is an accepted part of day-to-day life. Banks compete with each other by trying to offer high interest rates on bank accounts, and low interest rates on personal loans and mortgages.