Credit card has became a very important part of our life. The financial world is associated with various credit card brands such as Visa, Mastercard and American Express issued by international banks such as Bank of America, Citibank, HSBC, Standard Chartered and others.
The credit card machines have also evolved in tandem with the technology advancement. Now you can find many brands and makes. The popular and most common ones are Hypercom, VeriFone, Ingenico and FirstData.
Technology is evolving everyday. I remember years ago that the first credit card machines that I came across were those manual credit card imprinters. During that era, everything were manually done.
The cardholder present the credit card to the merchant. The merchant manually swipes the it over a sales slip over an imprinter.
The sales slip was carbonized ncr copy. The embossed information on the credit card was imprinted on the sales slip. The merchant would fills up the sales transaction details on the sales slip and the cardholder signs on it to complete the purchase.
The merchant would batch up all the sales slips for the day and send them to the acquiring bank to claim payment. The acquiring bank will pay the merchant and bill the issuing bank. In certain cases, the acquiring and the issuing bank is the same.
At month end, the issuing bank will send a credit card statement to the cardholder for payment. The cardholder will pay the issuing bank and this complete the full cycle of a credit card transaction.
Later as the technology advanced, the credit card machine evolved into an electronic data capture or EDC terminal.
The merchant no longer required to imprint the information on the credit card on the sales slip. In fact, the merchant swipes the magnetic stripe behind the card through a narrow panel on the EDC terminal.
The narrow panel is fixed with a magnetic card reader device. The device captures the information on the magnetic stripe behind the card and send it to the issuing bank for further processing and approval. Once the transaction is approved, the EDC terminal will automatically print the sales slip for the cardholder to sign.
The introduction of EDC terminal has helped to increase or widen the acceptance of credit cards at many other industries. The volume of credit card transaction shot up by many folds. Credit card became a very powerful financial instruments next to cash. Many merchants prefer them than cheques.
The EDC terminal later evolved into a wireless card terminal which uses rechargeable battery instead of a cable.
The merchant is still required to swipe the credit card through the wireless card terminal to transact a sales. This makes the credit card machine portable and allow flexibility in accepting credit payment in places without power cables.
Today the wireless card terminal has further evolved into a contactless card reader. The process of transacting a credit card payment for a sale is even made simpler. The merchant only need to tap the credit card on the contactless card reader instead of swiping. The speed of completing the transaction is very much shorten.
The contactless card terminal has opened opportunity using credit card on businesses that traditionally not possible such as fast food restaurants and toll collectors.
Credit card machine is not the only one that has evolved over the years. The design of the plastic card has also changed from since the day it was introduced.