Credit cards: from paper to your own face?

Most of us carry multiple cards in our wallets. The DNI, the driver’s license, the bank card, the public transport card, some work identification or the discount card of a place of which we are partners. Practically all share elements such as plastic and have a magnetic strip and a chip. What has been the path that credit cards, forerunners of all of them, have traveled up to here ?

This was the origin of credit cards

The history of credit through physical guarantees such as papers or letters is old. In fact, it is known that payment cards were used in classical Greece. Although it was not until 1887 that a card payment system was devised, in a novel written by Edward Bellamy titled Looking Backward .

At that time, the foundations of the credit card were being laid. Just a few years later, in 1914, Western Union issued the first credit card to build customer loyalty. The idea was copied by some large brands, but it took time to catch on in the population. Also, there were no standards yet and cards, made of paper or cardboard, could only be used by one company each.

The birth of the credit card as it is known today takes place by chance and serendipity, like almost everything. At a dinner in 1949, diners forgot their wallets. The embarrassment that followed was followed by the creation of the Diners’ Club card so that the situation did not happen again.

Although this account has sometimes been viewed with skepticism, what is certain is that this company was the first in the world to offer credit cards. They acted as intermediaries between the customer and the premises and charged three US dollars a year, which was a considerable amount at the time. This meant that for a time it could only be used in New York. But the germ of the multi-store card idea was already spreading outside the city.

The novel plastic and magnetic stripe

In 1958 the American Express was born, in the form of a paper card, and the Bank AmeriCard (today VISA), in the then novel plastic.

Plastic was, what times were those! A wonderful invention. Cheap, easy to handle, durable and lightweight, it had all the points to become for more than half a century the perfect holder for all types of cards. It was the king.

As early as 1959, when American Express surrendered to plastic, it included an electromagnetic band, a contribution from IBM. It had been used in computers for a long time as a storage method and it became a fantastic system for encoding information. Magnetic tape began to be used in everything from paying in stores to signing in the office.

The chip (integrated circuit) and the digitization of the card

In 1967, Master Charge appeared, called “the interbank card”, which in 1979 would be renamed MasterCard. Back then, all manufacturers were already using plastic for everything. In addition, all the cards were close to the currently standardized size. Today identification, driver or credit cards, among others, are the same all over the world.

A few years later, digital innovation spawned a new invention that quickly made its way onto cards. It was the microchip, an integrated circuit that became part of credit cards. For a few decades they were called “smart cards” for this reason, although today we already consider other types of more advanced innovations as “smart”.

Goodbye to plastic, to the band, to the chip and … to the card

Unstoppable, digitization has continued with Moore’s law and smartphones (which many people now consider simply phones) are already absorbing the powers of physical cards, although these still exist. In the case of CaixaBank, this entity has become the first in Spain to issue cards made of biodegradable and recycled materials . In fact, this year 85% of the cards issued by CaixaBank will already use recycled plastic and biodegradable components in their composition.

Along with this innovation, the virtual credit card is becoming popular , available from an application, with which to pay through systems such as RFID, BIDI code (QR), links, API or similar systems. In addition, digital banking itself gradually makes the physical format obsolete, since it allows payments through the app equivalent to bank transfers.

The evolution of contactless payment systems suggests that, in the future, it will not even be necessary to have a physical medium such as a mobile phone or a card: facial identification will suffice to pay. A technology, biometrics , that CaixaBank has pioneered in ATMs. Along the way, subcutaneous chips appear to have not seen much acceptance as a payment technology.

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