Here are some fun and interesting facts about credit card processing that can add a bit of fun and intrigue to your understanding of how payment systems work:
1. The First Credit Card Transaction Was in 1950!
The very first credit card transaction occurred in 1950 when Frank McNamara used a paper card to pay for a meal at a restaurant in New York. This card was the precursor to modern credit cards and was called the “Diners Club” card.
2. Credit Card Processing Involves Multiple “Players”
When you make a credit card purchase, your card is passed between multiple “players”: the merchant, the acquiring bank, the payment processor, the credit card network (like Visa or MasterCard), and the issuing bank (the bank that issued the credit card). It’s like a little relay race!
3. “Swipe” Isn’t Always the Best Option Anymore
Swipe and sign used to be the go-to method for credit card transactions, but EMV chips (the small metal chips on cards) are now the preferred security method. Chip-enabled cards are more secure because each transaction gets a unique code, making it harder for fraudsters to steal your data.
4. Plastic Cards Are Not the Only Way to Pay
Today, credit card processing isn’t limited to plastic cards. You can pay with smartphones, watches, and wearables that are linked to your credit card accounts via mobile wallets like Apple Pay, Google Pay, and Samsung Pay.
5. Mobile Payments Are Growing Like Crazy
The use of mobile wallets and contactless payments is growing rapidly! In fact, by 2025, it’s expected that over 50% of credit card transactions will be mobile or contactless.
6. Credit Card Processing Can Happen in Seconds
What seems like a slow process actually happens incredibly fast. Credit card transactions are authorized in just a few seconds—most likely in the time it takes you to type in your PIN or sign the receipt!
7. Credit Card Processing Is Global
Credit cards aren’t just for the U.S. In fact, Visa and MasterCard are accepted in over 200 countries, making it one of the most universal forms of payment in the world.
8. There’s a Secret to the 16 Digits on Your Card
Your credit card number isn’t just a random string of digits. The first six digits (known as the Issuer Identification Number, or IIN) represent the bank that issued the card. The rest of the number identifies your specific account and the final digit is a check digit used to validate the card number using the Luhn algorithm.
9. Crypto Meets Credit Cards!
Some companies have started experimenting with crypto credit cards, allowing you to spend cryptocurrency like Bitcoin at places that accept traditional credit cards. It’s a cool fusion of two worlds!
10. The Rise of ‘Invisible’ Payments
Some companies are testing the future of credit card processing with invisible payments—think Amazon Go stores, where you can walk in, grab your items, and leave without ever having to swipe or tap your card. It’s all done via sensors and apps that automatically charge your account.
11. Plastic Credit Cards Are Getting Smaller
You’ve probably noticed credit cards are getting thinner and lighter. In fact, contactless cards are often made from thinner, more flexible materials that can even be folded—but don’t try this at home!
12. Credit Card Fraud Is a Big Business
Unfortunately, credit card fraud is a huge industry. In fact, credit card fraud costs the global economy billions of dollars each year. Thankfully, chip cards, tokenization, and fraud detection tools are helping reduce fraud.
13. Processing Fees Aren’t Just About “Big” Companies
Did you know that even the smallest businesses, like food trucks or corner shops, often have to deal with credit card processing fees? These fees can add up, but businesses usually find that the convenience of accepting credit cards outweighs the costs.
14. The Credit Card Machine Was Once a “Plate”
Before digital point-of-sale systems, credit card transactions were processed with carbon paper and a machine that would make an imprint of the card on a receipt, much like a “plate” of paper. It was labor-intensive but worked to get the payment processed.
15. Credit Card Processing Can Help Fight Hunger
Some credit card processors partner with charities. For instance, when you make a transaction, a portion of the fee can be donated to charity—turning everyday purchases into opportunities to give back.