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Card Payments: The Past, Present And Future



Person paying with a credit card

Paying by card is a relatively new concept. 50 years ago, almost no-one had a bank card. Nowadays, everyone has one. This post takes a look into the evolution of card payments, as well as some of the future developments that are likely to occur. 

The past

The concept of a credit card can be traced back to the Diners Club Card. The idea was inspired by Frank McNamara, a businessman who’d forgotten his wallet while out to dinner in New York. Launched in 1950, the Diners Club Card allowed cardowners to pay later for meals when dining at select restaurants.

The first bank ‘cards’ were issued by Barclays in London in 1967. They looked more like cheques and allowed cardowners to withdraw cash from an ATM. Shortly after, PIN numbers were introduced.

The invention of the magnetic stripe in 1969 allowed cards to store data. During the 70s, debit cards and credit cards became more popular as card companies like American Express, Mastercard and Visa (previously BankAmericard) started to become more renowned.

The present

Nowadays, most of us pay primarily by card. Cards now contain EMV chips that are more secure than magnetic stripes, storing a digital code that changes with every purchase in order to make card data much more tricky to hack.

The invention of contactless card readers has made using a card even more convenient too. Not having to enter a PIN can speed up transactions and prevent the need for physical contact with a card reader (which was useful during the pandemic).

Cardless payments have also become more popular. Card information can now be stored on websites, allowing us to make purchases on our card even without having our card present. Card information can also be stored in a digital wallet app on our personal devices – this has enabled contactless payments to be made using a smartphone or a smartwatch. 

The future

More stores are starting to go cashless and putting up ‘card only’ signs. In the near future, we could start to see physical cash being phased out in favour of card payments. This would help to reduce money laundering and could reduce the hassle of handling and storing cash for many businesses, 

Eventually we may even start to see physical cards being phased out and replaced by virtual card payments. There will be no need to carry around a plastic card when you can scan your device or even pay remotely via an app (many restaurants are already starting to introduce menu apps that allow customers to order food and pay at their table without interacting with a staff member).

Other developments that could improve card payments include AI fraud detection on credit cards. Right now, one of the biggest downsides of credit cards is fraudulent chargebacks or ‘friendly fraud’. Using future technology, it may be possible to reduce fraud by immediately identifying suspicious payments and chargebacks. This could make accepting credit card less risky for many industries. 

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