So what can businesses learn from the last half-century’s experience?
“There has to be a business case for new developments,” says James McDonald, Barclaycard’s Head of Strategic Initiatives and Innovation. “You have to solve an issue for your customers or create an opportunity for them.”
Check out the timeline below for some of the major innovations to hit the high street – and beyond.1966 – Credit cards hit the UK: Most people may recognise this year due to England’s footballing success but another landmark event happened that year too. For the first time, British shoppers could pay with plastic when Barclaycard launched that summer. “Credit cards are incredibly empowering to people,” says James. “Introducing a personal finance tool like this for consumers was phenomenal.”
1968 – Bacs launches: This is the organisation that processes automated payments such as direct debits, although in 1968 it was set up to facilitate the electronic transfer of funds between banks. In 2015, 6bn payments were made via Bacs and in April 2016 a new world record was set when 103.7m transactions were processed in one day. It’s also how most of us receive our salaries. Thank you Bacs.
1973 – The UK’s first credit card for women appears: It sounds unbelievable now but before 1973, women weren’t allowed credit cards in their own names without their husbands or fathers vouching for them.
1977 – The UK’s first company credit card is introduced: This was designed to help businesses make payments (and to keep a beady eye on their employees’ expense accounts).
1986 – DARTS scores a bullseye: A major innovation for retailers was the Data Capture and Authorisation Retail Transaction Service. Thankfully, this electronic payment system became better known as PDQ. These terminals rang the death knell for the old zip-zap machines that were previously used to take carbon copies of cards. It also allowed large volumes of credit and debit card sales to be processed quickly and easily. Queues were cut, and electronic payments meant businesses got their cash faster. Win win.
1987 – The UK’s first debit card is launched: Shoppers got two options to pay with plastic in 1987, with debit cards joining credit cards in purses and wallets throughout the nation3.
1990 – Cashback arrives: It’s simple. You go shopping, use a card to pay your bill, and the shopkeeper hands over a fistful of cash if you ask for it. Ok, the cash was yours to begin with but it’s still a lot quicker than going to the cash machine. It’s also another way businesses can use payments to benefit their customers.
1995 – Credit cards go online: Barclaycard was the first UK credit company to go online with Barclaycard Netlink, allowing customers to pay their utility bills via the internet4. Soon they were checking statements and settling their accounts with debit cards in what was most definitely a taste of things to come.
2003 – Chip and PIN hits the high street: It may be hard to remember a time before Chip and PIN, but it’s not that long since it was introduced into our lives. It began as a trial in 2003, adding a much greater level of security for both consumers and businesses. Today it still accounts for the lion’s share of all card transactions.
Card acceptance among UK merchants5
2007 – Contactless launches in the UK: When contactless payments were introduced, they changed the payments landscape forever. “Contactless has probably had the biggest impact of any Barclaycard innovation since the launch of the credit card,” says James. “That includes opening up payments by smartphone, which has helped make payments a lifestyle experience.”
2008 – Faster Payments arrive: This service allows payments between customers of different banks to be made quickly and securely, 24 hours a day. Virtually all online and phone payments are now processed this way6, and it means there’s no longer a wait of several working days for money to arrive in accounts after a payment.
2012 – Barclays Pingit is introduced: When this launched it was Europe’s first person-to-person service to send and receive money using just mobile phone numbers. It meant no more asking for bank account details, and no more slightly sweaty palms when asked to hand them over either.
2015 – Apple Pay launches in UK: This was the moment when mobile payment solutions really entered the public consciousness. They’re likely to stay there for quite some time, with James saying that the focus from retailers will be about embedding payments into the overall customer experience .
So while many things have changed in payments over the last 50 years, the overall lesson remains the same. It’s all about putting customers first.
Sources3 UK card association - history of cards
Please note that the views expressed in this article are personal opinions. Barclaycard cannot accept any responsibility or liability for reliance by any person on this article or any of the information set out in it.