Plastic money(Credit Cards)-Past,Present & Future

Credit Cards-How It All Started?

  After moving on from the "Barter" era,for further several centuries,people used coins and then currency notes to pay for goods and services.The first payment card was introduced in 1920s in the United States of America.It was called "Shoppers Plate" and could be used only at selected shops.The year 1950 marked the real beginning of the "Plastic money" which most  of us are familiar with today,when the founder of Diner's Club Frank Mcnamara launched a charge card in USA.The first bank to issue a credit card was ther Franklin National Bank in New York in 1951.Bank of  America who joined the band wagon saw more potential for income and and allowed the other banks also to issue their 'Bank Americards' and to interchange transactions.Then four California banks joined to introduce the 'MasterCharge' programme to compete with the Bank Americard.

Birth Of Visa and Master Card

By the mid 1970s,the credit card industry started exploring international waters.In 1977,bank Americard became VISA.Then in 1979,MasterChrage followed suit and changed its name to MasterCard.

Arrival Of the Credit Card in Sri Lanka


     With the Bank of Ceylon issuing the first credit card in the year 1989 under the lable "Visa International" credit card era dawned in Sri Lanka,although 'Golden key' company take honour for issuing the first charge card in the country.Sampath bank followed suit by issuing the first "Mastercard" in Sri Lanka.According to Visa International statistics, Sri Lankans are using 11 million debit cards and over 950,000 credit cards at present(2014).At present there are 24 commercial banks,in the market who are engaged in issuing and acquiring credit cards under the major brand names in credit cards such as Visa,MasterCard and American Express(Amex).


Credit Card Frauds,How they are done and How to Minimise them?

   Increased credit  card usage was not without complications.With the rapid growth of the credit card industry,incidents of fraudulent transactions also emerged.What started as a trickle of incidents subsequently increased to a deluge,especially in developed countries as well as in countries such as Malaysia,Taiwan and China.
Types of Frauds


        There are two major types of frauds that the industry has been plagued wit hover the last few years.
       1.Credit card frauds in Internet Transactions.
       2.Credit card "Skimming" frauds

Fraud in Internet("Card Not Present sales")

      There has been a direct co-relation between the tremendous growth in E-Commerce usage and fraudulent credit card transactions.People who gave their card numbers to purchases on the internet found their credit card being compromised in fraudulent activities.E-commerce merchants who sold merchandise on the web on their strength of credit card numbers many a time had to bear losses when it came about that the real owner of the card was unaware of the transaction.
      Until recently,solutions that focused on "card not present" fraud problem have been largely unsuccessful,due mainly to the high costs and uncertain technology.
   Visa and MasterCard have been working at remedying this serious situation.The CVV2 program will be a much needed protection for card holders as well as merchants in all "card not present" transactions.

What is CVV2 and How does It provide protection?

        
                             Many experience internet shoppers now know that it is much safer to enter your credit card number on a secured on-line web site than it is to give your credit card to waiter at a restaurant.It is safe to use a "secured payment gateway"as these web sites are called.Details of the credit card is safeguarded by very high technology and the site has to be entered into by using a password.Only draw back is the hish cost for a merchant for setting up a suchpayment gateway for his business,or hire a site from a banka or such service provider.

What is "Skimming"?

   
       "Skimming" is the copying of data from the "magnetic tripe" of a genuine credit card and encoding it on to a counterfeited plastic card.When one of these counterfeited cards are used on a Electronic Data Capture(EDC)terminal transactions are authorized as if they were made from the original genuine card.Generally "skimming"is carried out at merchant outlets where the credit cards with traffic of high value credit limits is frequent,and also where card is taken out of the card holder momentarily for transactions such as star class hotels.