In the movie "Time", people of the future pay for time by leaning their hand against the counter with a glowing clock implanted in it. But even now we can do without cash and pay for purchases with a smart watch or other gadgets. Existing means of payment have come a long way: from cardboard cards to payment using biometric data, for example, Face Pay. In this article, we will look at the stages of formation of such a familiar part of our life as non-cash payment.
The very first cards were made of cardboard and were produced by Mobil Oil in the United States since 1914. The owners ' details were either printed or stamped on them and used as a document when making a purchase. They were issued only to regular customers and confirmed their ability to pay, allowing them to pay for fuel or buy goods at gas stations with a delay, for example, at the end of the month.
In 1919, the Western Union company issued cards for senior officials with a fixed amount of credit. With their help, they could send a telegram at the expense of the government. On the back of the card there is an inscription: "Payment not being required from the sender at the time of transmission".
Paper cards quickly fell into disrepair and in 1929 the Farrington Manufacturing company, which manufactures metal boxes with engraving and cases, released metal plates on which the owner's data was stamped (embossed). The manual squeezing device was patented, as was the company's signature font, Farrington OCR 7B, which is still used today. Payment was made as follows: the buyer gave the card to the seller, a special device, an imprint, made an impression of the card data on the receipt, after which it was signed and sent to the Bank for settlement.
In 1946, the payment was made according to the "Charge-it" scheme (the idea belongs to an employee of the Brooklyn bank "Flatbush"), according to which the seller accepted a receipt from the buyer for the purchase of goods in the store, transferred it to the bank, and the bank, in turn, transferred money from the client's account.
Over time, payment cards were issued by an increasing number of businesses. However, the problem was that such a tool could only be used at the point of sale of the company that issued the card.
The next stage of development of payment cards took place in 1949 during a dinner of Frank McNamara and his friends in a restaurant. The entrepreneur didn't have enough money to pay the bill. Then he came up with the idea to create a single card that would cover many restaurants and retail outlets. Soon he organized the company Diners Club International, which acted as an intermediary between the buyer and seller. Operations on their cards were conducted in Los Angeles, Boston and New York. Diners Club International became the first independent credit card company in the world to start working with credit cards.
In 1951, Diners Club International issued the first license to use its system in the UK. From this moment, the era of development of plastic cards began.
With the growing popularity of credit cards, banks have not been left out. One of the most successful was Bank of America, which issued the BankAmericard card. In 1966, the bank began issuing licenses for issuing its cards to other banks, thus marking the beginning of the development of the VISA payment system. Opposition from Bank of America's competitors in 1967 led to the creation of an Interbank Card Association, called the Interbank Cards Association, which in 1969 was renamed MasterCard.
In 1960, IBM commissioned the US government to develop a method for storing data on a plastic card. It was decided to store the information on a magnetic medium. IBM engineer Forrest Peri could not glue the magnetic strip to the plastic: when using glue, it deformed, and it was impossible to read the information. His wife suggested melting the strip into the plastic with an iron. So there was the first magnetic stripe on a plastic card, which allowed you to read information from the card and transfer it directly to the bank.
In the USSR, the first plastic cards appeared in 1969 - at this time Diners Club signed an agreement with the State Committee for Tourism. But for the overwhelming majority of citizens of the USSR, they were not available, they were used by organizations under the control of Intourist with the help of Vnesheconombank. Payment with foreign citizens was made either at currency points of sale "Berezka", or in hotels where foreigners lived. Following Diners Club in 1974, Visa (then still Americard) and Eurocard entered the USSR market in 1975. But all these cards were issued by foreign banks.
In 1986 Vneshtorgbank started issuing its own Eurocard plastic cards. The very first copy was presented to the General Secretary of the CPSU Central Committee, Mikhail S. Gorbachev. And in 1988, the bank joined the VISA payment system and issued cards for Soviet Olympic athletes participating in the 1988 Olympics in Seoul.
However, in the early 90s, all companies using plastic cards had to suspend their programs in the USSR, and only in 1997-1998 VISA entered into agreements with banks that appeared after economic reforms. One of them was Credo Bank, followed by contracts with Inkombank, Most-Bank and Mosbusinessbank.
In 1999, three payment systems Europay, Mastercard and Visa created an independent company EMVCo (named after the first letters of the names of the founding companies), whose primary task was to manage, maintain and develop chip technology.
Unlike a magnetic stripe, EMV chip technology is very difficult to crack. An important aspect of EMV technology is the use of so-called dynamic data. To confirm each transaction, a unique code is used, which is very difficult to predict or calculate without using the original card. The fact that such a number is unique for each transaction does not allow criminals to reuse it for unauthorized withdrawals or transfers of funds, even if the transaction data fell into their hands.
In the race for security in 2010, Visa and Mastercard provided the market with a new generation of cards. In addition to the magnetic stripe and microchip, they were equipped with a display and touch keyboard. Using this technology, the client could receive one-time passwords for online payment. The display also showed the history of card transactions, account balance, etc. When performing the operation, you need to click on the special button and enter the PIN code, after which a one-time password is generated, which is necessary for authorizing the payment. The card's built-in battery kept it running for up to three years. However, this decision did not become widespread.
A little later, the American IT company Dynamics presented a prototype of the card, where only the first 10 digits of the number were plotted. The rest were replaced by a built-in display. After entering the PIN code, the remaining 6 digits of the number were displayed. The card was also equipped with a display and keyboard. The Dynamics MultiAccount card combined two bank accounts: to switch from one account to another, there were special buttons on the front side of the card. Built-in illumination allowed you to determine which of the two accounts is currently active.
To emphasize the premium status, bank customers can get an individual version of the plastic card, which will not be like any other. Credit institutions offer their clients the possibility of making cards with gold, silver or bronze paints, transparent cards, cards with UV light, cards with textured or textured coatings, cards with thermochromic paint, cards with 3D or holographic effects, cards with LEDs, cards made of metal and many others.
For example, the UAE has a Dubai First Royale Card. This product is only available to UAE monarchs or very wealthy clients. The card is an unlimited credit card with 24/7 luxury service. It is covered with real gold and decorated with a diamond.
[HEADING=3Current payment instruments in the XXI century[/HEADING]
In our time, one-touch payment has become widespread, especially in times of a pandemic. In fact, a contactless card is a chip card that interacts with a payment terminal not through traditional contacts that you usually see on your card, but through an encrypted radio signal distributed by an inconspicuous mini-antenna built into it. On such cards, two pins extend from the chip that we see to the antenna that is located inside the card.
Since the connection between the card and the terminal does not necessarily have to be a contact one, you can use other devices instead of the card. This contactless payment is based on NFC (near field communication) technology. It allows you to exchange data between devices located at a distance of about 10 cm without using the Internet. Usually, the bank's payment application is embedded in the chip and the client's personal payment data is recorded. Such NFC chips can be used not only in plastic cards, but also in so-called form factors – keychains, bracelets, watchbands, payment rings.
Thanks to the rich technical capabilities of smart cards, including those with NFC technology, in addition to its main function, a bank card can also perform other functions, such as: a card for driving on urban public transport, a medical insurance policy, security identification cards (electronic certificates), access cards (ACS), campus cards, loyalty cards, and many others.
The development of NFC technology has initiated the use of mobile wallets, such as Apple Pay, Samsung Pay, Google Pay, which can be used to add a bank card to the phone or smart watch app. Many of us are already used to using a smartphone as a bank card. In fact, the card as plastic is no longer necessary. You can issue a digital card via the mobile app and add it to your mobile wallet.
The card is emulated either via a mobile app – a user-friendly interface is created and a secure communication channel is provided, or via a cloud platform – all information is stored on a remote server.
Before the introduction of HCE, information about payments made was stored in a specially created secure segment, which was located either directly in the phone or on a Micro SD memory card or on the SIM card of the mobile operator. With this solution, developers of payment services had to negotiate with suppliers of secure segment carriers, and users often changed their SIM card or even their phone. Therefore, the introduction of HCE was a real breakthrough in the field of contactless payments. This solution is supported by Android, Blackberry, and Windows operating systems. This technology is incompatible with Apple phones, as it implements technological solutions using its own developed cryptoprocessor.
The level of protection of HCE payments is significantly higher than that of a conventional contactless card, since most of the data required for performing operations is stored in the gadget's memory. Additional protection is provided by biometric sensors built into modern smartphones.
But the events of 2022 made their own adjustments for the Russian payment market, when Apple Pay, Samsung Pay and Google Pay stopped supporting Visa and Mastercard cards issued by Russian banks. And later, Apple closed the ability to add WORLD cards as well. Currently, payment using a mobile wallet is only available to owners of Android devices using the Samsung Pay and Mir Pay apps.
At the end of 2022, Russian bank card manufacturers found a way to return the usual one-touch smartphone payment to iPhone owners and presented payment stickers.
A payment sticker is a sticker with a built-in NFC chip that you can stick on your phone, case, or other wearable device and pay as before. In fact, it is a smaller version of a bank card. You can pay with a sticker in all terminals that provide contactless payment.
It should be understood that the smaller the sticker, the smaller its antenna, so the range will be less, it is worth applying to the part of the terminal where the card reader is located. Among other things, the sticker is equipped with a special ferrite layer, and this iron alloy blocks the NFC of the smartphone.
An important bonus is that when paying with a sticker, cashback is saved in accordance with the rules of the issuing bank, in contrast to payment using a QR code, which is carried out through an SBP transfer.
Unlike the card, the sticker does not contain payment details.They are located on the detachable part of the plastic card, so the payment stickers are well protected in terms of security. The only risk is loss, which is equivalent to losing your smartphone. In this case, you must immediately block it.
Bank DOM.The Russian Federation is already testing payment stickers and plans a mass release for the second quarter of 2023.
(c) https://vc.ru/domrf/656456-ot-kartona-k-biometrii-evolyuciya-plastikovyh-kart
Prototypes of modern plastic cards
The very first cards were made of cardboard and were produced by Mobil Oil in the United States since 1914. The owners ' details were either printed or stamped on them and used as a document when making a purchase. They were issued only to regular customers and confirmed their ability to pay, allowing them to pay for fuel or buy goods at gas stations with a delay, for example, at the end of the month.
In 1919, the Western Union company issued cards for senior officials with a fixed amount of credit. With their help, they could send a telegram at the expense of the government. On the back of the card there is an inscription: "Payment not being required from the sender at the time of transmission".
Paper cards quickly fell into disrepair and in 1929 the Farrington Manufacturing company, which manufactures metal boxes with engraving and cases, released metal plates on which the owner's data was stamped (embossed). The manual squeezing device was patented, as was the company's signature font, Farrington OCR 7B, which is still used today. Payment was made as follows: the buyer gave the card to the seller, a special device, an imprint, made an impression of the card data on the receipt, after which it was signed and sent to the Bank for settlement.
In 1946, the payment was made according to the "Charge-it" scheme (the idea belongs to an employee of the Brooklyn bank "Flatbush"), according to which the seller accepted a receipt from the buyer for the purchase of goods in the store, transferred it to the bank, and the bank, in turn, transferred money from the client's account.
Over time, payment cards were issued by an increasing number of businesses. However, the problem was that such a tool could only be used at the point of sale of the company that issued the card.
The next stage of development of payment cards took place in 1949 during a dinner of Frank McNamara and his friends in a restaurant. The entrepreneur didn't have enough money to pay the bill. Then he came up with the idea to create a single card that would cover many restaurants and retail outlets. Soon he organized the company Diners Club International, which acted as an intermediary between the buyer and seller. Operations on their cards were conducted in Los Angeles, Boston and New York. Diners Club International became the first independent credit card company in the world to start working with credit cards.
In 1951, Diners Club International issued the first license to use its system in the UK. From this moment, the era of development of plastic cards began.
With the growing popularity of credit cards, banks have not been left out. One of the most successful was Bank of America, which issued the BankAmericard card. In 1966, the bank began issuing licenses for issuing its cards to other banks, thus marking the beginning of the development of the VISA payment system. Opposition from Bank of America's competitors in 1967 led to the creation of an Interbank Card Association, called the Interbank Cards Association, which in 1969 was renamed MasterCard.
Magnetic stripe cards
In 1960, IBM commissioned the US government to develop a method for storing data on a plastic card. It was decided to store the information on a magnetic medium. IBM engineer Forrest Peri could not glue the magnetic strip to the plastic: when using glue, it deformed, and it was impossible to read the information. His wife suggested melting the strip into the plastic with an iron. So there was the first magnetic stripe on a plastic card, which allowed you to read information from the card and transfer it directly to the bank.
In the USSR, the first plastic cards appeared in 1969 - at this time Diners Club signed an agreement with the State Committee for Tourism. But for the overwhelming majority of citizens of the USSR, they were not available, they were used by organizations under the control of Intourist with the help of Vnesheconombank. Payment with foreign citizens was made either at currency points of sale "Berezka", or in hotels where foreigners lived. Following Diners Club in 1974, Visa (then still Americard) and Eurocard entered the USSR market in 1975. But all these cards were issued by foreign banks.
In 1986 Vneshtorgbank started issuing its own Eurocard plastic cards. The very first copy was presented to the General Secretary of the CPSU Central Committee, Mikhail S. Gorbachev. And in 1988, the bank joined the VISA payment system and issued cards for Soviet Olympic athletes participating in the 1988 Olympics in Seoul.
However, in the early 90s, all companies using plastic cards had to suspend their programs in the USSR, and only in 1997-1998 VISA entered into agreements with banks that appeared after economic reforms. One of them was Credo Bank, followed by contracts with Inkombank, Most-Bank and Mosbusinessbank.
Microprocessor cards
With the development of the card business, fraudulent schemes also developed. Criminals have learned how to copy static data from a magnetic stripe and clone cards using so-called skimmers (for more details, see our other article on the history and methods of fraud). They used the information they obtained to make fakes. Magnetic stripe cards could no longer provide the proper level of security.In 1999, three payment systems Europay, Mastercard and Visa created an independent company EMVCo (named after the first letters of the names of the founding companies), whose primary task was to manage, maintain and develop chip technology.
Unlike a magnetic stripe, EMV chip technology is very difficult to crack. An important aspect of EMV technology is the use of so-called dynamic data. To confirm each transaction, a unique code is used, which is very difficult to predict or calculate without using the original card. The fact that such a number is unique for each transaction does not allow criminals to reuse it for unauthorized withdrawals or transfers of funds, even if the transaction data fell into their hands.
Unusual payment cards in the 21st century
In the race for security in 2010, Visa and Mastercard provided the market with a new generation of cards. In addition to the magnetic stripe and microchip, they were equipped with a display and touch keyboard. Using this technology, the client could receive one-time passwords for online payment. The display also showed the history of card transactions, account balance, etc. When performing the operation, you need to click on the special button and enter the PIN code, after which a one-time password is generated, which is necessary for authorizing the payment. The card's built-in battery kept it running for up to three years. However, this decision did not become widespread.
A little later, the American IT company Dynamics presented a prototype of the card, where only the first 10 digits of the number were plotted. The rest were replaced by a built-in display. After entering the PIN code, the remaining 6 digits of the number were displayed. The card was also equipped with a display and keyboard. The Dynamics MultiAccount card combined two bank accounts: to switch from one account to another, there were special buttons on the front side of the card. Built-in illumination allowed you to determine which of the two accounts is currently active.
To emphasize the premium status, bank customers can get an individual version of the plastic card, which will not be like any other. Credit institutions offer their clients the possibility of making cards with gold, silver or bronze paints, transparent cards, cards with UV light, cards with textured or textured coatings, cards with thermochromic paint, cards with 3D or holographic effects, cards with LEDs, cards made of metal and many others.
For example, the UAE has a Dubai First Royale Card. This product is only available to UAE monarchs or very wealthy clients. The card is an unlimited credit card with 24/7 luxury service. It is covered with real gold and decorated with a diamond.
[HEADING=3Current payment instruments in the XXI century[/HEADING]
In our time, one-touch payment has become widespread, especially in times of a pandemic. In fact, a contactless card is a chip card that interacts with a payment terminal not through traditional contacts that you usually see on your card, but through an encrypted radio signal distributed by an inconspicuous mini-antenna built into it. On such cards, two pins extend from the chip that we see to the antenna that is located inside the card.
Since the connection between the card and the terminal does not necessarily have to be a contact one, you can use other devices instead of the card. This contactless payment is based on NFC (near field communication) technology. It allows you to exchange data between devices located at a distance of about 10 cm without using the Internet. Usually, the bank's payment application is embedded in the chip and the client's personal payment data is recorded. Such NFC chips can be used not only in plastic cards, but also in so-called form factors – keychains, bracelets, watchbands, payment rings.
Thanks to the rich technical capabilities of smart cards, including those with NFC technology, in addition to its main function, a bank card can also perform other functions, such as: a card for driving on urban public transport, a medical insurance policy, security identification cards (electronic certificates), access cards (ACS), campus cards, loyalty cards, and many others.
The development of NFC technology has initiated the use of mobile wallets, such as Apple Pay, Samsung Pay, Google Pay, which can be used to add a bank card to the phone or smart watch app. Many of us are already used to using a smartphone as a bank card. In fact, the card as plastic is no longer necessary. You can issue a digital card via the mobile app and add it to your mobile wallet.
HCE (Host-based Card Emulation)
HCE or Host-based Card Emulation technology first appeared in 2013 with the release of Android KitKat 4.4 platforms. It is this technology that allows users to make purchases using a mobile wallet. It allows you to emulate all the information about the user's bank card in a mobile device and make payments using NFC. By the way, this applies not only to bank cards, but also to various loyalty cards, passes, transport and other cards.The card is emulated either via a mobile app – a user-friendly interface is created and a secure communication channel is provided, or via a cloud platform – all information is stored on a remote server.
Before the introduction of HCE, information about payments made was stored in a specially created secure segment, which was located either directly in the phone or on a Micro SD memory card or on the SIM card of the mobile operator. With this solution, developers of payment services had to negotiate with suppliers of secure segment carriers, and users often changed their SIM card or even their phone. Therefore, the introduction of HCE was a real breakthrough in the field of contactless payments. This solution is supported by Android, Blackberry, and Windows operating systems. This technology is incompatible with Apple phones, as it implements technological solutions using its own developed cryptoprocessor.
The level of protection of HCE payments is significantly higher than that of a conventional contactless card, since most of the data required for performing operations is stored in the gadget's memory. Additional protection is provided by biometric sensors built into modern smartphones.
But the events of 2022 made their own adjustments for the Russian payment market, when Apple Pay, Samsung Pay and Google Pay stopped supporting Visa and Mastercard cards issued by Russian banks. And later, Apple closed the ability to add WORLD cards as well. Currently, payment using a mobile wallet is only available to owners of Android devices using the Samsung Pay and Mir Pay apps.
At the end of 2022, Russian bank card manufacturers found a way to return the usual one-touch smartphone payment to iPhone owners and presented payment stickers.
Payment stickers
A payment sticker is a sticker with a built-in NFC chip that you can stick on your phone, case, or other wearable device and pay as before. In fact, it is a smaller version of a bank card. You can pay with a sticker in all terminals that provide contactless payment.
It should be understood that the smaller the sticker, the smaller its antenna, so the range will be less, it is worth applying to the part of the terminal where the card reader is located. Among other things, the sticker is equipped with a special ferrite layer, and this iron alloy blocks the NFC of the smartphone.
An important bonus is that when paying with a sticker, cashback is saved in accordance with the rules of the issuing bank, in contrast to payment using a QR code, which is carried out through an SBP transfer.
Unlike the card, the sticker does not contain payment details.They are located on the detachable part of the plastic card, so the payment stickers are well protected in terms of security. The only risk is loss, which is equivalent to losing your smartphone. In this case, you must immediately block it.
Bank DOM.The Russian Federation is already testing payment stickers and plans a mass release for the second quarter of 2023.
(c) https://vc.ru/domrf/656456-ot-kartona-k-biometrii-evolyuciya-plastikovyh-kart
