A Brief History of Bank Cards: From Paper to Contactless " Contisystems

Bank cards are an essential part of our routine. But have you ever stopped to think about how they have evolved? From the first cards made of paper and metal to modern contactless cards, each stage of history has been marked by advances that have brought more security and convenience to our daily lives. In this article, we'll travel through time and explore how bank cards have evolved and revolutionized the way we handle payments.

The First Steps: Western Union and Diners Club

The history of bank cards begins in 1914, when Western Union created one of the first metal credit cards. It was exclusive to selected customers and allowed them to postpone payments for telegraph services without interest. Although simple, this was the beginning of the "customer card" concept.

Years later, in 1950, the Diners Club Card appeared, the first multi-purpose card, accepted in various establishments. Created by Frank McNamara, the card was born out of an unexpected need: McNamara forgot his wallet during a dinner party and decided to create a solution that would allow him to pay bills without having to rely on cash, which would be charged at the end of the month.

Following on from Diners Club, American Express launched its own credit card in 1958. Although innovative for the time, these cards still relied on manual payment processes and were limited in terms of technology and security.

Embossed Cards and the "Iron Plate"

In the 1950s, the first plastic cards with embossed data appeared. To carry out a transaction, the merchant would place the card in a printer with a carbon paper form and pass a roller over the card, transferring the embossed information to the paper receipt.

This method arrived in Portugal in the 1970s and represented a breakthrough, but it still had limitations, such as slow processing and the impossibility of checking balances in real time.

The Magnetic Strip Revolution

The real technological breakthrough came in 1969 with the creation of the magnetic stripe by Forrest Parry, an IBM engineer. This innovation made it possible to store data directly on the card, speeding up transactions and reducing errors.

In Portugal, magnetic stripe cards began to be used in the 1980s, with the arrival of the Multibanco network. This change not only made payments faster and safer, but also allowed the creation of a network of interconnected banks, facilitating the use of cards throughout the country.

The Leap to Chip: More Security and Functionality

With the increased use of cards, security concerns have arisen. That's where the EMV chip came in.

The EMV chip (an acronym for Europay, Mastercard and Visa, the companies that developed the standard) was a major breakthrough in the sector. Created by Frenchman Roland Moreno in 1974, the chip began to be significantly implemented in bank cards in the 90s. This microprocessor enabled a leap in security by generating a unique code for each transaction, which made card cloning much more difficult.

In addition to security, the chip has brought new features, such as the possibility of carrying out offline transactions in places without a network, especially useful in regions with limited connectivity. The use of PIN as an additional authentication method has further strengthened the security of chip cards, quickly becoming the new global standard.

The large-scale implementation of chip cards in Portugal took place progressively throughout the 1990s, but it was in the early 2000s that chip cards became widely used, especially after the official adoption of the EMV standard for all card transactions.

The Age of Contactless: One-touch convenience

In the last decade, the need for faster and more convenient transactions has led to the development of contactless technology.

Based on NFC (Near Field Communication), contactless allows payment by proximity, without the need to insert the card into the terminal. Simply bring the card close to the reader and the transaction is completed in seconds.

The contactless system was initially viewed with some concern for security reasons, but operators have set limits on PINless transactions, and encryption has become increasingly sophisticated.

Today, contactless is one of the fastest and most widely used payment methods in everyday transactions, facilitating the user experience. It was especially after 2015 that contactless payments gained popularity in Portugal, with an increase in the number of compatible terminals and greater acceptance by consumers.

The COVID-19 pandemic in 2020 has significantly accelerated this adoption, as many consumers and merchants have come to prefer contactless transactions to reduce health risks.

What about the future of cards?

The evolution of bank cards is far from over. Technologies such as biometrics and tokenization promise to make payments even more secure and personalized. Although physical cards may give way to digital alternatives, personalization will continue to be an important way of reflecting customers' identity and relationship with banks.

A Story of Transformation and Innovation

The journey of bank cards, from the first metal cards to modern contactless, shows how technology can transform our lives.

At Contisystems, we are proud to be part of this history, developing personalization and card production solutions that keep pace with the needs of a constantly evolving world.