The Evolution of Credit Card Payments

Since the advent of the cheque some 350 years ago, payment methods used to acquire goods have come a long way and it is now easier than ever to do so. While the cheque seems to be in a state of irreversible decline, new technologies like contactless payment are going from strength to strength in the UK.

But how have we reached this stage? Here, we’re going to chart the evolution of plastic and dwell on some of the most important landmarks in this process.

The Evolution

The concept of a credit card can be traced back as far as 1887, when US author Edward Bellamy explored the idea in his novel ‘Looking Backward’, which was influential among intellectuals of the time and even inspired a number of utopian communities.

There was, however, a sizeable time lag between when the concept was first developed and when it was turned into a reality. And there were also a series of small steps that occurred before the card became fully fledged.

In 1914, for instance, Western Union provided some of their customers with a metal card that gave them deferred payment privileges; and then, in 1950, the Diners Club released plastic payment cards in the US, which were accepted in 27 restaurants around the country.

However, it was only in the 1960s that the evolution of the credit card began to gather pace, when American Express was launched in the UK (1963) and Barclaycard issued the first credit card (1966). A year later, Barclays Bank launched the world’s first cash machine in Enfield.

In 1972 the Access credit card launched, thanks to the combined efforts of NatWest, Midland, Lloyds and TSB. And due to the increasing prominence of such cards, 1977 saw the introduction of the Consumer Credit Card Act, which is designed to safeguard card payments.

Despite this, there was still considerable progress for the payment industry to make before it reached the stage we’re at today. For instance, the first debit card launched in 1987, while in 1992, MasterCard launched its Maestro brand for its international debit card.

Obviously, the popularisation of the internet marked a fork in the road for the banking industry and in 1997, Nationwide Building Society launched the first online banking service. This feature is common across all banks and building societies today.

Chip and pin payments arrived in 2003, making it easier than ever for retailers and consumers to perform a sale at the checkout. And then in 2007, things went one step further when Barclaycard debuted contactless credit cards in the UK, allowing consumers to make purchases of under £20 with minimal fuss.

Payment methods have clearly come a long way since the idea was first mooted in the late 19th century. This is welcoming news from a consumer viewpoint as it has become increasingly easy to buy goods in store and on the internet. For this reason, it should come as no surprise to learn that contactless payment has increased yearly since it first launched and that 249 million cards are expected to be used for such transactions in 2014.

Payment Sense Card Payments Final draft 5 The Evolution of Credit Card Payments

8 thoughts on “The Evolution of Credit Card Payments”

  1. Really interesting article, I honestly thought that credit cards were decades older than this. You can count me among those who believe that all payments in the future will be made via the smartphone.

    1. @Andy: Smartphone, uh? I have a contactless debit card and like using it. Everytime I use it, a shop assistant tell me they’d never use it because the don’t see it as secure enough.

  2. Interesting facts about the credit card history. It’s crazy to think that it was only 27 years ago when the first debit card came out. Now they are so heavily relied upon. That, and credit cards. I think we are more likely to do finger print scanning than the other alternatives.

    1. @Daisy: This is very interesting from investment point of view; there is a lot of investment going on contactless technologies; partly because these are to bring all our interactions on a single device. Fingerprint scaning is a different trajectory.

  3. Very interesting article I also think fingerprint scanning will be used in the future. Apple are already using fingerprint technology to unlock your iPhone.

    1. @Pauline: Not needing cards for access to your money will be rather good. I have this problebmwith pin codes (keep having those mixed up) which will be completely redundant. This also sounds more secure than contactless and otherdevice based approaches.

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