The History of Credit Cards

Since the first bartering systems of early civilization, payments have evolved quite a lot. As the technology that allows us to make payments grows, the industry is constantly developing and dynamically adapting and improving. The introduction of online payments over the internet marked a major milestone in the payments industry, for example. Here’s a quick overview of the evolution of the payments industry over the past 40 years.

Pre-internet payments

The first credit card terminal was introduced by Visa in 1979. By the 80’s it was adopted by many major retailers and gave rise to the popularity of electronic platforms. The switch to electronic meant that payment networks and payment processors went through major changes. Whereas before they used paper voucher logistics companies, they moved to electronic communications providers who needed to construct efficient, affordable electronic payment acceptance services in a global scale. Without the internet at their disposal yet, this meant a large network of telecommunications relays and data management platforms.

Online payments

In the mid-90’s, the arrival of the internet shifted the payments industry once again. Businesses moved online, and required online payment terminals to suit their digital needs. Instead of competing with existing processors, a few companies chose to focus on creating merchant- and consumer-facing technologies instead. These are now known as payment gateways, the virtual equivalent of payment terminals, which adapt web-based transactions to fit into existing payment processors.

Integrating with payment processors

Online commerce took off in the late 90’s with the introduction of massive online stores such as Amazon and eBay. Payment processors were experiencing an influx of transaction from payment gateways. The payment processors acquired better equipment to handle the load, but there were several integration barriers. During this time, payment processors were flourishing from the high demand, and continued to specialize their services. This meant that each gateway could only serve the needs of certain segments, requiring payment processors to buy or partner with multiple payment gateways to cater for their entire customer base.

By the turn of the century, software developers were integrating directly with payment gateways to route transactions to a number of different processors. This prompted a huge leap in innovative technologies to aid the process, such as local data storage, processing power, tokenization and the integration of point of sale (POS) software.

Where we are today

New payments providers are in abundance today, with business owners being spoilt for choice, or, more often than not, at a loss of whom to choose. Some offer older technologies than have just been built upon from their early 80’s models, while others offer shiny new technologies but fall short in other aspects. The best choice for merchants is a payment processor that offers an end-to-end solution in a single platform by encompassing the entire payment, from checkout to settlement. Your payment processor should also be dynamic and fluid, capable of adapting to the next advancement in the payments evolution.

For more information about the credit card industry or to sign up for a merchant account, please call (888) 924-2743 or go to


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