By Himanshi Gauniyal
A small card in a coloured envelope with which payments are done, that too, very easily. From checking bank balance to with drawing money, credit cards have made it a hassle free and a cashless experience.
Human Trade & History
Trade in human history has come a long way. Far before the discovery of paper money people used cattles, food and shells for exchange of goods, known as the Barter System. With Human Civilization, goods were traded and the debt was recorded, allowing the payments to be done later. About 5000 years ago, in Mesopotamia, merchants started using creditious clay tablets which were marked in order to record the transactions. This was the first time humans recorded their transactions in the form of text and language; this practice continued for a long period, until the industrial revolution took place.
The Industrial Revolution and modern expansion drastically increased global trade and led to the development of economies. During the 1800s, United States’ merchants used credit coins or cards in order to trade with the farmers. By the end of the 19th century, the financial companies started issuing metal plates to specific customers and restricting the transaction amount to a certain limit. The obsolete introduction by the Brooklyn Banker, John, introduced the first closed loop charge it card, where the card holder used the card for the purchase, the amount being paid by the bank and then the customer would be liable to pay back the amount to the bank. The Union metal plate and the charge card are prototypes of credit cards.
First Credit Card
The first ever credit card was introduced by- THE DINERS CLUB, run by two business partners Frank Mcnamara and Ralph Schneider in 1949. The event behind the discovery of the first credit card ever was the experience of Mcnamara when he visited a restaurant to enjoy the cuisine but forgot to carry his wallet, where he was asked by the restaurant manager to wash dishes if unable to pay the bill, though he promised the restaurant owner for payment of the bill later by signing a piece of paper. This incident made him work on the idea of creating something that promises payment, in absence of cash. After discussing the idea with Ralph, they both introduced people to the Diners Club where the members were offered cardboard cards and they were accepted in around 27 restaurants in New York city. Started with 200 people, the club had more than 4200 members in less than 2 year’s time. With more restaurants joining in, it allowed more venues for the club members to attend. It became easier for people to carry small cards as they fit better than cash. With this, credit cards became a common part of people’s lives.
Credit Cards Now
The credit card trend caught on with various companies. A massive innovation in the late 1960s was observed, leading to the introduction of the first Plastic Credit card by The American Express in 1959. The American card then merged with various regional companies and this led to the discovery of VISA
In 1966 a revolving card was introduced by the Bank of America, which still exists. People having this card were able to use it in any state of the United states.
In 1969 the plastic credit cards were fitted up with magnetic strips, so that they can be scanned and swiped up easily. This peculiar invention was done by Forrest Perry, who first tried to attach the strips with the card, but succeeded by ironing it later. With time credit cards were ironed with magnetic strips making the scanning easy.
In 1970, the Fair Credit Reporting act was passed in the USA in order to protect customers and service providers, forcing companies to be transparent with the card holders with every information and money location.
Later, The US President, Ford, signed an Equal Credit Opportunity Act which prohibited the credit card companies from discriminating against the holders on the basis of race, gender, etc. In 2009, a new legislation was passed by president Obama ensuring no unfair taxation or charges are implemented on credit cards and also ensuring the accountability, responsibility and disclosure to the customers by the Companies.
Back in 1996 further addition was seen in common credit cards in Europe. Microchip add-on to the plastic credit cards were made to ensure the safety since the magnetic strips could easily be copied leading to unauthorised access to a person’s bank account.
In 2010 Barclay and Orange introduced the first contactless payment cards which were easy to use. Later Apple Pay and GPay were introduced.
Credit Card Fraud & Scams
With all these innovations came various opportunities of theft and fraud. Credit Card frauds are the most common attempted use of credit cards or card numbers. Using a credit card that you don’t own is considered as theft of someone’s identity. Credit card theft was prevented by the introduction of EMV and electronic processing. Nowadays most common fraud or scam with Credit Cards is through emails, as the receipts and the information of transactions shared via mails can be used to derive every necessary information. Advance Payment Schemes, Certified Credit Cards, creation of fake credit cards are other scams and frauds. Banks have enabled EMV verification and holograms to avoid such frauds but the increase in transactions is making it difficult to be tracked.
Credit Cards have a long history from clay tablets to plastic cards, there has been an immense development with technology. Observing the daily economy, the technological dependence on digital methods is increasing with leaps and bounds. It is predicted that the future of credit cards will shift from physical cards to virtual cards, making it all accessible via smartphone. For the protection of the bank’s money, biometric verification for cash withdrawal can be introduced to avoid copying and cheating of data.
Future of credit cards seems more welcoming for technological innovations.
All we are in for is to see if these convenient ways would be helpful or not in the future that advanced technology holds for us!
ABOUT THE AUTHOR
Himanshi is a botany student and a content writer, who is enthusiastic about discovering new fields, studying commerce and the environment. Passionately learning new things and working on her development everyday.
Disclaimer: The views expressed in this article are the author’s own and do not necessarily reflect the views of the organization.
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