Nowadays, you can hardly find people making a transaction using their cash. Most of our daily transactions tend to occur through payment cards like debit or credit cards or UPI payment modes. Instead of using money every time we make a transaction, we find it easy to get the payment through payment cards.
Whether you are paying for your escape game at the Wild Goose Escapes or are purchasing your favorite lipstick at a store nearby, you are likely to use a card for the payment. But have you ever wondered what the history of these payment cards, which we use so flawlessly today, was like? Or maybe, what the future holds for these payment cards?
This article will offer a brief overview of the past and future of payment cards. So, let’s get started.
A flashback to the past of payment cards
Did you know that the first-ever record of credit card slots dates back to as early as ancient Mesopotamia? It dates back when people used clay tablets to trade with their neighbors. Since then, payment methods have become more straightforward and safer than ever.
In the late 19th century, stores started issuing paper loyalty cards. It allowed customers to run a monthly balance of their debts, which again was collected by the store’s representative at the end of the month.
The first-ever precursor to the kind of credit cards we use today dates back to the ‘Charge Plate,’ used in the early 1930s. It was a rectangular sheet of metal measuring about two and a half inches by one and a quarter inches. You can find the customer’s name, the city, and the person’s state embossed on the metal. After that, it was laid in an imprinting machine, present under a charge slip, and an inked ribbon was imposed on it.
The need for alternative payment methods simultaneously increased with the gradual boom of the post-war economy. Around that time emerged a ‘Diners Club card,’ which allowed diners to make payments simply by using the card. Within the following year, Diners Club membership grew to 42,000 in the US, and businesses across Mexico, the UK, Cuba, and others also started accepting these cards. Even in the same era, credit card sizes were standardized based on the first credit card issued by the Bank of America in 1958.
In the 1960s came a shift to longer-lasting payment cards, as banks started issuing plastic cards to customers. American Express started the trend in 1959, and consequently, it was followed up by other banks, like the Bank of America and Diners Club.
An IBM engineer developed the magnetic strip used in payment cards. He started growing it with the initial thought of wanting to combine a strip of magnetized tape with a plastic identity card made especially for CIA officials.
The next innovation surged with the development of chip and pin cards. Two German engineers back in the late 1970s incorporated a silicon-integrated circuit chip into what was a plastic smart card. While it took time for the chips to get incorporated into the payment cards, we can find the first cards rolling out in 1986 in France. Germany followed soon after, and so did the rest of Europe!
Looking forward to the future of payment cards
Since payment cards have access to the cardholder’s banking details, maintaining strict control over funds is crucial. Nowadays, one can find the gradual emergence of different card-controlling applications like MobiMoney. These apps allow users to manage their cards from their mobile phones directly. They can set their spending limits and other factors using these apps.
The future can offer us a complete shift to an age of cardless payments. Smartphone technologies may be wholly synchronized with debit or credit card functionality. One can observe a gradual change in NFC technology, supporting the use of mobile wallets. By using these mobile wallets, users can evolve their entire transaction process.
Mobile wallets offer users greater convenience when it comes to making online payments in various online shopping platforms or in escape rooms. They even offer users a greater level of security than payment cards alone. The in-built security hurdles inside these mobile wallets authenticate the user and prevent fraud. Further, these wallets even combine added protection by using fingerprint locks, six-digit passwords, and the device chip itself.
By heralding an age of cardless payments, users can benefit from making seamless payments almost instantly. It further allows users to store transaction receipts securely on their mobiles for a long time.
This way, a gradual shift to digital cards will make payments hackle-free and more secure than ever. While the future of payment cards remains a little uncertain about envisioning, one can expect the peaceful co-existence of virtual and physical payment cards.