The basics of card payments ??Part 1: History

Let me tell you a fascinating story about the history of card payments.

It all started with a businessperson who accidentally left his wallet at a restaurant in 1949. He called his wife for help, and she promptly paid the bill.

However, Mr.?McNamara, "the businessman," was frustrated with the limitations of cash-only transactions. So, he came up with the idea to establish a club where members could sign up for their meals at restaurants and pay their bills later ??.

In February 1950, the first card scheme, Diners ClubR, was launched, making history in the card payment industry.

The "First Supper" at the first restaurant (the same restaurant) that accepted these cards was a momentous occasion. With 20,000 card members at its establishment, Diners ClubR quickly gained popularity and doubled its membership in just one year ??.

This event serves as a reminder that with determination and innovation, anything is possible.

Later on:

• In 1959, Bank of America issued the first "revolving credit" card, later called VisaR.
• In 1961, Japan Credit Bureau and Osaka Credit Bureau were founded in Japan, and later, both merged and became Japanese payment cards.
• In 1965, Eurocard International was established.
• In 1967, Cartes Bancaire was launched in France.
• In 1967, Master Charge was established, which in the late 1970s became MasterCardR.
• In 1992, Maestro was launched.
• In 2002, UnionPay was founded in China.
• In 2014, RuPay was launched in India.

By the turn of the 21st century, the internet and mobile technology advances revolutionized the retail industry.

Although more prominent and incumbent players were naturally less agile than new entrants, the payment industry quickly filled the void in those newly appearing areas with such major players as PayPal and Apple Pay.

Various service providers are emerging, such as independent sales organizations, technology vendors, and marketplaces. Alternative payment methods include digital and mobile wallets, crowdfunding platforms, and new electronic currencies such as Bitcoin.

Governments worldwide recognize the importance of payment and interbank networks,

which connect ATMs and banks into a transparent and interoperable network for consumers. As a result, payments are now viewed as a public infrastructure. To improve the availability and quality of service while reducing transaction costs, governments enforce standardization, simplify licensing requirements for new entrants, and regulate prices directly.

Let's talk now about the basics of card payments.

It is important to have a basic understanding of card payments. Card payments are a valuable tool for managing finances and making purchases. Industry standards regulate them.

• Card Shape:

Plastic payment cards are governed by ISO/IEC 7813, 7816, and 14443. They specify card size, magnetic stripe location, smart chip specifications, and contactless capability.

As we progress to the intermediate and expert levels, we'll take a closer look at these standards. ??

• Card Elements

On the front side of the card, you can see the following

1. The issuer logo indicates the bank that issued the card.
2. Card scheme branding Card schemes prescribe the logo location and size of their logo as well as the other aspects of the card design.
3. Integrated chip, sometimes also referred to as the EMV chip.
4. Card product. The indication of the card product is visible on the card; also, there are some requirements for the display of card type.
5. PAN or the card number. The Primary Account Number
6. Card expiry date. The format is typically two digits of a month over two digits of a year.
7. CSN It is the Card sequence number used when the issuer decides not to change the original PAN number. To distinguish between the old and new cards
8. Cardholder name. The Cardholder name is limited to 26 characters.

On the back side of the card, you can see the following

1. Magnetic Stripe The magnetic stripe (magstripe) is a band of magnetic material that contains iron-based particles capable of storing data. The data is read when the card is swiped. Magstripe has three tracks - Track 1, Track 2, and Track 3.
2. Authorized signature strip The signature is an area that is supposed to be filled by hand. For transactions requiring the cardholder's signature
3. Card Security Code The code on the back of your card used for security is known by several names, including CSC, CID, CVC, CVV, or CVN.
4. HologramHologram cards display holographic designs using light to create 3D visuals that change when viewed from different angles. They serve as unique and attractive collectibles and also prevent counterfeiting.
5. Bank contact informationThis number will help reach out to the issuer bank.
6. Payment Network logoThe logo of the network e.g., visa, MasterCard, etc...

In the upcoming articles, we will explore the various methods of payment card transactions, including swipe, insert, and contactless. We will also cover how payment card technology functions and how to use it safely and efficiently.

We hope you enjoyed reading the Article. Thank you for joining us. ??