The creation and evolution of credit card payments
The history of modern credit cards is a perfect example of a great idea that rapidly snowballed from its original conception.
Barely 12 years after it started as the local experiment of a New York bank, the credit card had become an international success story. Approximately 50 years after that, it had transcended being a physical item entirely.
John Biggins invents the ‘Charg-It’ card
A Brooklyn-based banker named John Biggins laid the foundation for modern credit cards.
Available only to customers of Flatbush National Bank, the ‘Charg-It’ enabled the buyer to purchase items without paying for them immediately. Merchants would record sales and send deposit slips to the bank, which would then reimburse the merchant and bill the customer.
Introduction of the Diner’s Club Card
The next innovation came courtesy of Diner’s Club founder Frank McNamara.
The Diner’s Club would bill its members on a monthly basis and then reimburse restaurants that had received their patronage. McNamara’s card employed a similar idea to Biggins’, but with a crucial difference: it was usable on a national scale.
AmEx releases its first credit card
Perhaps the first incarnation of the credit card as it is recognised today, American Express represented another leap forward by introducing consumer credit that was available internationally.
By the late 50s, people were increasingly on-the-move and AmEx pioneered a product that combined the security of traveller’s cheques with credit’s flexible payment terms.
Visa debuts POS terminals
Although credit was steadily becoming more accessible to consumers, processing times were still excessively long owing to pre-digital technology.
Visa changed that with the invention of electronic POS terminals. Although large and unwieldy in construction, these devices instigated a revolution in transaction speed that is still accelerating today.
Barclaycard issues contactless payment cards
Bringing convenience a step into the future, Barclaycard’s contactless cards negated the need to input a PIN for each transaction.
The implications of this innovation are still being explored today. From apps to wristwatches, contactless payments have rapidly become a consumer favourite. The technology particularly realised its potential during the COVID-19 pandemic, which made minimising physical contact a priority.
Tink partners with Novalnet AG for open banking payments
The Munich-based fintech Novalnet AG, which was founded in 2007 and is one of Europe’s leadingfintech companies, has announced a new partnership with Tink, the Swedish open banking platform currently connected to more than 3,400 European banks.
Novalnet AG delivers payment solutions and fully automated services, from checkout to debt collection. Its solutions are also available worldwide.
According to reports, the fintech company plans to launch a real-time payments feature for merchants across Europe, to expand its current services and enhance the transaction experience it operates through its platform.
The new feature, says Novalnet, will revolutionise payments for ecommerce with transactions being credited to merchant’s accounts almost instantly.
Novalnet partnership with Tink
By partnering with Tink for payment initiation services (PIS) technology, Novalnet will take previous region-specific payment methods and offer a new unified digital payments service to its merchants across Europe.
The fintech’s real-time merchant payments feature, which will be launched initially in Germany and the United Kingdom, will then be integrated across other European markets during 2021.
Speaking about the new collaboration, Emmanuel Kirse, COO of Novalnet, explained, "We expect great things from our strategic partnership with Tink, which is a significant development for both parties.
“With Tink, Novalnet can offer a new set of open banking-related solutions in Europe. The new opportunities offered by this partnership will help both Tink and Novalnet grow together, along with our merchants."
Cyrosch Kalateh, Regional Director for the DACH region at Tink said, “Our partnership with Novalnet is a big step for Tink in the German market, and we are excited to work together to bring new, innovative payments services to merchants across Europe.”
He added, “At the end of 2020 Tink committed to expanding its payment initiation services from five to 10 markets, fuelled by an €85mn investment round. We are proud to add Germany to this list by announcing we have now fully launched Tink’s PIS services in this market.”
Image credit: Novalnet AG