Development of card payment

A small rectangular plastic card on which data is stored makes it possible to pay while shopping, online shopping or in a restaurant by simply holding out the card. 

The concept of cashless payment has long been perceived as surreal. So how did we get to this payment option?

The Diners Club Card

The invention of the first payment card was based on the desire not to have to limit oneself to the cash carried.

Many people know the situation: only when paying do you realise that the cash is not enough to pay the bill.

This was exactly the situation Frank McNamara found himself in with his wife at dinner in a New York restaurant, having forgotten his cash in another suit. To save not only himself but also others from a similarly embarrassing scenario in the future, the entrepreneur founded Diners Club without further delay and thus launched the first universal credit card on the market in 1950.

The Diners Club card was the first credit card to charge a small percentage of the bill amount to merchants and was universally applicable. It was not long before the concept was taken up by New York's Franklin National Bank (1951) and Bank of America (1958), now known as Mastercard and Visa. 

Also in the 1960s, Eurocheque was introduced in Europe, EC for short. A cross-border, uniform credit cheque system that used an EC card to authorise the cheque issuer. In the course of time, this was extended to include the debit function so that money could be withdrawn from ATMs.

The German credit card

In Germany, the first credit cards were issued in 1959. However, the share of the invoice total was so high that the cashless payment option was hardly offered by traders and service providers. It was not until the "German credit card" was introduced by the German Retail Association (HDE) and the German Hotel and Restaurant Association (Dehoga) in 1987 that the commission on sales was reduced from 8% at the time to 2.75%.

Eventually, however, the EC card prevailed, as banks only charged 0.3 per cent of the purchase amount (minimum 15 pfennigs) from the retailer, which is why the acceptance of the EC card increased significantly.

Signature and magnetic strip

The security of card payments has also made significant progress over time to minimise the risk of fraud or counterfeiting.

At the end of 2010, the data security with the help of the magnetic strip was extended by an additional chip.

With the new NFC chip (near field communication), it is now possible to make contactless payments up to an amount of €50. All data is encrypted.