15 Jul ASK A FUTURIST SPEAKER: WHAT’S THE FUTURE OF CREDIT CARDS?
According to top credit cards futurists, consultants and keynote speakers, it’s hard to know where you’re going if you don’t know your past. Keeping this in mind, why don’t we talk about where this popular form of financing came from? The way that credit cards futurists and keynote speakers tell it, such options as we know them today have their roots in the 20th century, but the concept of credit itself dates back much further. Let’s recap some top moments in history here.
Early Concepts of Credit (Before 20th Century): The use of credit to purchase goods and services has been around for centuries, with local merchants and customers having informal agreements. The concept of “buy now, pay later” existed in various forms in different societies, or so credit cards futurists and keynote speakers remind us.
Charge Plates and Coin Systems (1920s – 1950s): In the early 20th century, department stores and gas stations began issuing proprietary metal charge plates or coins to their most trusted and regular customers for convenience and to encourage customer loyalty. Options were store-specific, meaning they could only be used at the issuing store or chain.
Diners Club Card (1950): The first multipurpose charge card, meaning it could be used at multiple establishments, was introduced by Diners Club in 1950. Frank McNamara, the co-founder, got the idea after he forgot his wallet during a business dinner. The Diners Club card was initially a cardboard card primarily aimed at salespeople who dined frequently at restaurants.
American Express (1958): American Express launched a travel-and-entertainment charge card in the U.S., which was also the first plastic card (replacing cardboard and celluloid).
BankAmericard (1958): This was the first revolving-credit financial system issued by a third-party bank (Bank of America) and licensed to other banks. Customers could carry a balance from one month to the next, thus creating the model for the modern credit card. The BankAmericard eventually became Visa.
Interbank Card Association & Master Charge (1966 – 1979): Several banks formed the Interbank Card Association (ICA) in 1966, which introduced the card named “Master Charge: The Interbank Card” in 1969. It was rebranded as MasterCard in 1979.
Discover Card (1985): Introduced by Sears, Discover was unique at its inception because it did not charge an annual fee and offered a higher-than-normal credit limit, features that were disruptive to the existing credit card industry.
Credit Card Technology Advancements: Over time, credit cards have evolved technologically, like credit cards futurists and keynote speakers are quick to observe. Magnetic stripes were added in the 1970s for storing data, followed by the use of personal identification numbers (PINs) for security. EMV chips (named after developers Europay, MasterCard, and Visa) were introduced in the 1990s and have become a global standard for cards due to their enhanced security. Contactless payment technology, which uses Near Field Communication (NFC), was developed in the 2000s.
Online and Mobile Payments (Late 1990s – Present): The rise of the internet led to the development of online shopping, requiring systems for online credit card payments. Today, digital wallets and mobile payment systems, like Apple Pay and Google Wallet, have created new methods of payment, allowing customers to use their credit cards or other banking methods through their smartphones.