close

What we have in our wallets, short history of credit cards in the world

blog-post-image

Nowadays, most of us can not imagine life without a payment or credit card. Although this is a relatively new invention, especially if we compare it to cash, cards are already in our wallets for good. What was their story like? When and where were the first credit cards created?

When did it start?

As we already mentioned -   credit cards   are a relatively new invention, but this does not mean that they have been developed over the last few years. The beginnings of this means of payment reach the end   Nineteenth century , and the first company that issued something like a payment card was the Hotel Credit Letter Company in the USA. Back then, however, they had a slightly different function - they were   authorization   to collect the ordered goods and save the customer's credit.

In 1914, the Western Union company introduced the first made credit cards to the market   of metal . Regular customers could use them to pay for the services provided by the company. Since then, the payment card market has started to develop dynamically, although it stopped a bit by the outbreak of World War II. Immediately after its completion, however, work on this functional invention was resumed. From 1949   Americans could already use credit cards with a more modern twist.

In the early 1950s, the rapid economic growth of the United States meant that the demand for credit cards increased enormously. Therefore, banks began to outdo each other in more and more advantageous offers to get as many customers as possible.

He set a faster pace for the development of this technology   Frank McNamara , who is still considered the father of modern payment cards. As he was at dinner at a restaurant, he realized that he had no wallet with him. The consequence of this mishap was   developing a document that could be honored by restaurants, and later also shops and hotels, so that carrying traditional money with you was unnecessary. Together with a partner, he founded a company   Diners Club , which is still operating on the payment card market. The first cards they issued were aimed at wealthy customers who used them when traveling, and they repaid the loan after returning home. These cards were called Travel & Entertainment.


The iconic American Express

Probably everyone has heard about the most famous credit card   American Express . The company issued the first card in 1958. It is of particular importance for the history of the development of this means of payment, because American Express was the first to start issuing pre-made cards   made of plastic .

Although the first Travel & Entertainment cards had the characteristics of a credit card, the first proper card of this type was the one, issued like American Express in 1958, called   BankAmericard . The debt on this card could be repaid in full, or it could be divided into smaller amounts and only the minimum amount could be repaid.

This card quickly gained competition and already in the 1960s a similar solution appeared   in Europe , under the name EuroCard.

Magnetic strip

The next big breakthrough in this technology came after more than twenty years when they started to be placed in credit cards   a magnetic strip that aided in its verification. It happened in 1972, and BankAmericard reintroduced the idea. A year later, BASE I was introduced, followed by BASE II, which was the first electronic card verification system. So far, verification has been made by phone.

The next leap in development was the introduction   cards with a chip that we know today. It happened in the early 1990s. He had   improve security   transactions carried out. Since then, the form of the cards has not changed much - we still use plastic credit cards with a metal chip.

Today, Visa dominates the credit card market, but it is closely followed by its great rival - MasterCard.

Back to the posts list

Archives

  • January 2021 (3)
  • March 2021 (2)