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The Green Sheet Online Edition

July 27, 2009 • Issue 09:07:02

ISOMetrics

History of payments technology

The long and event-filled history of the payments industry parallels key advancements in technology. In fact, the two are inextricably linked, like NASA and microwave ovens. Here are a number of the highlights.

1951 - The first credit card (Diner's Club) is rolled out.

1958 - Bank of America launches the BankAmericard in Fresno, Calif.

1959 - American Express Co. introduces plastic cards; previously cards were made of celluloid or cardboard.

1966 - Fourteen U.S. banks form the first bankcard processing association to exchange information on credit card transactions.

1967 - Four California banks form an association called Master Charge (which was renamed MasterCard in 1979) to compete with BankAmericard (which became Visa in 1977).

1968 - The automated chip card is invented in Germany.

1970 - The magnetic stripe becomes a feature on credit cards following the London Transit Authority's installation of a magnetic stripsystem in the London Underground in the 1960s.

1973 - IBM introduces computers that can control POS devices.

1974 - Smart cards are patented in France.

1976 - Debit cards are introduced in Europe.

1992 - Books.com, the first online bookstore, is created - two years before the beginning of Amazon.com - setting the stage for online commerce.

1992 - Microchips are embedded into all French debit cards, leading the way to the widespread adoption of smart cards.

1995 - Europay, MasterCard and Visa (EMV) co-develops industry-wide chip card specifications to ensure that all chip cards will operate with all chip-reading terminals.

1998 - Mobile payments are tested in Finland when two vending machines are enabled to work with short message service payments.

2003 - A chip and PIN card trial is completed in Northampton, England, and the technology is rolled out nationwide in the United Kingdom the following year.

2004 - The chip and PIN card is rolled out in Europe, where it's now universal.

2004 - Digital check scanning is introduced in the United States.

2007 - The PCI Security Standards Council adopts the Payment Application Data Security Standard based on Visa Inc.'s Payment Application Best Practices.

2008 - The PCI SSC sets a series of deadlines for payment card security technology compliance, including a Sept., 30, 2010, deadline for level 1 and level 2 merchants, who after that date cannot retain consumer card data, such as PINs.

2009 - The Secure POS Vendor Alliance is formed by payments industry executives to help foster the proper adoption and use of payment data security technology.

Sources:
- Mobilizing for the next wave of U.S. payment innovation, by James McCauley
(Principal Consultant, Capco), Rahul Kapur (Managing Principal, Capco)
and Suresh Gupta (Partner, Capco)
- Wikipedia
- The New York Times
- the PCI Security Standards Council
- United Bank Card Inc.
- SC Magazine
- First Data Corp.
end of article

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