The earliest medieval merchants were pedlars who sold goods to towns and villages but by the 12th century Europe had grown more prosperous and more goods were produced. Merchants were no longer simply wandering adventurers. They became dealers, employers and ship owners sending their carriers along a network of trade routes linking the major European cities. By 1300, cargo ships from Genoa and Venice in Italy were taking precious metals, silks and other luxuries from the eastern Mediterranean out to England and Flanders (Belgium). There they picked up wool, coal, and timber for the return voyage. German and Dutch ships took iron, copper, and lead south to the Mediterranean and brought back wine oil and salt.

In the beginning a debt could be recorded on a tally stick. Notches were cut into it to record the amount, then the stick was split in two and each party kept half. When the debt was settled the tally was destroyed or kept as a record. As time went on merchants found they needed to keep more accurate accounts of their money and stock. Then traders in 14th century Florence developed a system of double entry book-keeping. Each deal was recorded in the two ledgers - one for the credits and one for the debits. The amounts in each ledger should always balance.

As trading methods grew more complex, much more paperwork was needed. Merchants had to pay clerks and scribes to help them. There were letters giving details of business deals, bills of sale, orders, contracts to suppliers and documents promising payment. All of these had to be signed and marked with the wax seals of the merchants involved.

Most of the coins used in the middle ages were silver but in 1252 the city of Florence minted the first gold coins since Roman times - the golden florin. Because of the different currencies used throughout Europe merchants carried a small set of coin balances for weighing coins to determine their value.

As the trade flourished in Europe so did the banks. Banking had begun in Italy with the moneylenders who did business on benches or banks. They grew rich on the interest they charged for their services. The cities of Florence, Venice, Siena and Genoa became particularly wealthy. Banking was not without risk however as two banks found out in the 1350's when Edward III of England (1312-77) was unable to pay back a massive loan.