The Evolution of Credit Cards:      From Diners Club to Contactless Payments

In the ’90s people used to receive a maroon-coloured envelope and this envelope used to carry a few booklets, rectangular-shaped plastic and a few papers on each thing, the logo of a bank is mentioned with their name. These cards can be used to check bank balances and take money from an ATM.

 

From the era of cards to the transition to chip cards and contactless cards the industry has witnessed a drastic change. In terms of transactional cards have not only evolved but also eased payment options from the consumers. Let’s explore the components of a credit card and go through the history of how it started and what changes it has witnessed till now.

 

The credit card concept was founded in 1890 by Edward Bellamy in the novel Looking Backward. This term was mentioned 11 times in that novel. Rather than borrowing by spending a citizen’s money from the government, the card can be used to purchase things.

 

 

The first entry is a Business card for the individual stores.

In the history of transactional cards, Charga-Plates are considered the first stepping stone. It was offered by the business person to the customers in the US, in 1928. It was of specific use and can only be used in individual stores. Whenever a user made any purchase manual entries were maintained.

 

By Bank First Card: In New York, the National Bank of Brooklyn was the first bank in 1946 to issue a charge card. This card was released between bank customers and local businesses. First businesses had to deposit sales slips to the bank and in turn, it was used to bill the customers.

 

Across multiple stores, first card: In 1950 Diners Club further introduced the Diners Charge Card and at several stores, these provide facilities to the shop by using the same card. At that time customers have to send a monthly statement of their expenses according to which they are required to pay.

The credit card issuers in the range of 3-5% of the total sales, businesses were required to pay as a service charge.

 

First Interbank card: In 1958 Bank Of America issued the BankAmericard and later it was named Visa in 1976. The other bank didn’t want to build the entire system then this collaborated with such banks. VISA means Visa International Service Association.

 

Last International cards: Both MasterCard and VISA set up rules, policies and grounds around issuing, payments and usage on various banks worldwide. These companies are not only allowed nationally but also internationally. As of today, VISA is controlling 61.5% of the payments and MasterCard controls 25% of the global payment.

Credit Card in India

People who used to live or travel to foreign countries in the 1960s were the only ones who opted for the Diners Card in India. It took approximately 15 years to reach 8000 registered Diners Card in India and it shows that adoption was so slow.

In 1980 the Central Bank of India launched its first credit card and it was followed by Andhra Bank in the same and both were Visa-based brands. In 1988 Vijaya bank introduced Mastercard to the consumers for the first time in India. But in this, there was a difference in that Vijaya Bank allowed withdrawal only from their branch. The income of the consumer decides the eligibility of the credit card.

 

A lot of PSU banks between 1988 and 1993 started issuing credit cards. It was the same time when ATMs were also increasing in India. In India, this was taken as an opportunity because, at the same time, Indian banks started introducing debit cards and provided them the ease to withdraw anytime whenever they were in need. This is the reason that debit cards got the name ATM cards. Due to wider acceptability at the shops and better product offerings the credit card industry started gaining popularity in a competitive landscape. In terms of fraud zero liability, at this time banks used to offer insurance offers, reward points and other things were also introduced. A significant number of consumers in the Indian market by the late 1990s were aware of debit cards and credit card products.

 

The drastic change that was witnessed was the introduction of online payment which was only limited and penetrated by the internet and availability of cards. Credit and debit card holders in 2010 started making payments online mode and availing of the services. The upcoming decade was a turning point in Indian digital payment history.

 

In 2012, Rupay was launched to issue credit, prepaid cards and Indian brand debit by the National Payment Council of India. Rupay gained traction in tier 2 and 3 cities by 2018 and today these cards in India have higher penetration than Mastercard or Visa.

 

Use of Cards

Over the years the cards issued by the banks have evolved for the customers to provide ease of shopping and ensure transactional security. It is the responsibility of the cardholder to know the features of elements and card features to avoid card-related fraud. If you notice that there are various elements on the debit and credit card. Then let’s take a look at them:

 

• Card Number: It is a 14-19 digit card number and it is a sensitive portion of the card. It is used to identify the account and it should not be shared with anyone.
• Cardholder name
• Validity date: A few cards have both dates of expiring and issuing. This is used when one shops online.

 

Conclusion

 

It was such an interesting experience to witness the journey of the transactional cards. Such a small plastic can hold the cash and can ease the customers both offline and online. In today’s world these cards consider cashless payment methods and the most interesting thing about these cards is that they interact when one uses them offline or online. This article contains the journey of the card and an effort to share and spread knowledge about the history of the cards.