Money? Let’s talk about history.

The first two moderately adopted credit cards were the “Charge-It” card (National Bank of Brooklyn) in 1946 and the “Diner’s Club” card in 1950, some 60 years ago. American Express and Visa (originally named BankAmericard) both came out in 1958. However according to earlier records some form of the technology existed even in the 1920s, and there’s even references dating back as far as the 1890s. That’s almost 120 years ago.

The actual technology that powered credit cards has changed drastically over the years as well. One of the first iterations used paper with an ink slip, and a small manual copying machine (called a flatbed imprinter) to make 2 copies of the embossed information on the card by pressing the card between the paper and the bottom of the imprinter. You then had to take all the slips with the quantities and signatures of the card holder to the bank and deposit them manually.

Bank issued credit cards started out more like delayed debit cards in the sense that when you got your bill you were required to pay it in its entirety. Slowly
installment based payments were added, and even the concept of a credit score which is defined by your ability to repay your credit card bills on time.

At first the cards were really only marketed to travelling salesmen but by the 1960s credit companies started marketing to the general public and instantly they were hooked. The interesting part about this is that the cards themselves didn’t drastically change during that period, just the target audience.

It took years for regulation and legislation to catch up to credit card technologies. The Consumer Credit Protection Act of 1968 (18 years after the Diner’s card release) was the first legislation to require lenders such as banks to fully inform consumers requesting credit cards of the actual details of their subscriptions such as hidden fees and loan terms as well as previously undisclosed annual percentage rates.

In the 1970s the U.S. congress actually banned pre-activated credit cards from being mass sent to recipients that didn’t even request them. During the 2008–2009 (almost 60 years after the Diner’s club card) recession and global financial crisis many people were forced to put more on their credit card than they could pay back. Penalties and defaults kicked in and affected people from all walks of life. Because of this an act called Credit Card Accountability Responsibility and Disclosure (CARD) was passed which set up some regulatory structures and legislation that provided some protections for
people using credit cards such as giving the people ample time to pay bills, defining notification requirements for rate increases, restrictions on marketing directly to people under the age of 21 who might not understand the full implications of their financial decisions, and a few other things which were noticed to be of impact during the crisis. Like a lot of things, something bad had to happen first before proper management and guidelines could be implemented.

The regulations haven’t always been in favor of consumers though and deregulation has also caused interest rates to be allowed to go up to levels that aren’t in favor of the general consumer. Like everything, it’s a balancing act which most people who actually use the technologies aren’t even allowed to take a seat at the decisions table.

It’s now 2019 and there’s still work to be done. Sixty plus years after the first widely used Credit Card and there’s still kinks in the system. However, the transparency and decision making power afforded to consumers now is better than what it was only a few decades ago. Banking itself has undergone transitional periods of regulatory legislation as well which has brought us into the new consumer era we are now accustomed to and aligned technological expectations by providing easier access to web and mobile banking.

We are in the best technologically advanced financial period of our entire existence. The truly interesting thing about that fact is that we’re not even close to how absolutely seamless our financial systems can be. User-experience is something that is talked about endlessly in any consumer-facing company, but the hard truth and bottom line is that user-experience itself is a byproduct of a lack of true integration into our lives and understandings.

Let’s forget for a moment the possible privacy implications of the technological theory I’m about to lay out and imagine a future where you walk into a grocery store and walk out with your goods without ever touching a machine, scanning anything, or conversing with a cashier. Now take that same thought and extrapolate it across your entire life and every paid activity you do. Public transportation, movie theaters, drivers license renewals, and everything in between. You’d never have to take a credit card out of your pocket again, or pull cash out of an ATM. You’d never even have to wait in a line.

Now imagine the years of legislation it will take to make it work for consumers, instead of for everyone except for consumers. The bright side is that we can lean on a lot of the previously passed legislation aimed at credit cards and general banking since the underlying concepts are very similar. This would be a great initial step in a positive direction, however we also don’t want to carry along the baggage that we’ve accumulated over the years either.

Did you know that the actual technology required for that future to exist… already exists? You might even have every single thing required for it in your pocket, right now. The real question here is how we transition from A to B. Things are rarely “replaced”. Instead something completely different comes along and is used in unison until the easier solution is adopted and slowly edges out the older and less functional system naturally. We’ve seen this process countless times in our lifetimes. Uber & Taxis, Blockbuster & Netflix, Newspapers & News sites, Checks & Credit Cards, Radios & Televisions, Horses & Cars. At one point, both existed options simultaneously. Some still do, but one is an obvious winner.

The future we spoke briefly about a moment ago isn’t actually the future, it’s happening right now. The parts and pieces of it are being worked on around the world by brilliant people with the very humble goal of making our lives easier and more transparent. The countless “new banks” that are purely software based and don’t even have physical banking locations (such as ApplePay and PayPal), blockchain technologies with their ability to transfer value across the world in seconds without the need for a middleman, NFC chips embedded into credit cards and passports, QR codes which dominate payments in eastern cultures (WeChat), and many many more technological advancements which are really only now beginning to make entry into our everyday lives. The future is incredibly exciting for anyone with a geeky bone in their body.

It’s only a matter of time until the marketing shifts, the target audience changes and suddenly everything is different, yet once again.