Credit card payment systems – then and now 06/04/15


The history of payments systems is a fascinating one and one doesn’t have to get a degree in finance or economics to understand that humanity has come a long way from paying in seeds to using a credit card. This transition depends on many factors, from social to economical ones, but, most importantly, it depends on technology. Today’s credit card payment system could not be more different from the rudimentary one used in days of yore. It involves advanced card readers, a lot of security systems and even the use of virtual money. They can be seen as an extensive and complicated infrastructure where every element is a cog in the machine and where every detail needs to be streamlined. An error, as small as it may seem, can have huge consequences and in its turn generate even larger errors that can compromise entire economies.

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The traditional paper payment system used initially by banks was abandoned as soon as technology made possible the development of computerised systems. Paper involved more work and attention to detail and came with the risk of human error. However, the newest technologies have made the payment process quite simple and have reduced the risk of human error to a minimum. Now, most systems are electronic and there are very few countries that have stuck to the traditional option, mostly developing ones. The United States and Western Europe are at the forefront of these technologies, their companies usually being the first to adopt new systems.

 

One of the biggest breakthroughs in this field was determined by the ascension of smartphones and wireless devices. Physical money is slowly being replaced with virtual money and people can use their phone to make transactions in online and land-based stores. With the NFC technology, they can pay even without using a credit card. In this context, the prospect of having a wallet filled with bills and coins is slowly being replaced with the idea of having one single device synchronised with the user’s credit cards. This might have seemed like a futuristic endeavour one century ago, but now it has turned to reality. The transition involves more responsibility from retail stores and sellers in general. They can no longer limit themselves to accepting cash only. Customers have the technology to pay wirelessly and they expect providers to have it too. Payments are no longer conditioned by the existence of a countertop. Even though countertops remain popular in certain fields, other options such as mobile and portable machines are starting to emerge as the go-to options for sellers that are always on the go.

 

Implementing credit card machines is not longer an option, but a vital necessity. Even though the past decades have brought major changes in a short time frame, stores have to keep up with them and embrace modern solutions, not regard them with scepticism. At the rate of the tech evolution, we can expect even more from the years to come. Adding aspects such as globalisation into the equation, some even expect to see unified offshore systems.