Business credit

Credit cards go vertical, abandoning the classic look and the magnetic strip

From the old method of copying an account number and asking a customer to sign a purchase until the advent of magnetic tapes and today’s chip and pin systems, the act of using a credit card hasn’t changed much over the past 50 years, although technology under the hood has.

But that seems to be changing as vendors and card issuers move away from the style of card that IBM engineer Forrest Parry is credited with. invent in the 60s and towards something a little more modern.

The most obvious change right now is turning the familiar horizontal wallet-shaped credit card sideways and adopting a new vertical configuration that is faster and easier to use.

Cowyk Fox, an executive at South African Absa Bank, explained why this is happening.

“Think about how you use your card when shopping,” he said. “When you hand your card to a cashier, tap it to make contactless payments, or dip it in a point-of-sale machine, you’re probably holding it on the short end, vertically,” Fox said.

While the technology that makes them work is constantly evolving, the actual look of most credit cards hasn’t changed much over the years. (Simon Dawson / Bloomberg)

Portrait orientation makes it easier to touch

The vast majority of credit card transactions today are done either online, where no physical card is involved, or using chip and PIN technology, or tap-to-contactless systems. pay. But these transactions still take place on infrastructure built for the previous generation of swipers, so the industry is modernizing to keep up with consumer tastes while increasing security behind the scenes.

“A portrait orientation [is] easier to operate, ”MasterCard Canada’s vice president of digital products, Suhkmani Dev, told CBC News in an interview. “From a user’s perspective, this is a good design for a number of reasons.

While consumers generally think they owe the brand money on their card, the debt is held by whoever actually provides the card, with MasterCard, Visa, or Amex just processing the transaction.

That’s why Dev says MasterCard doesn’t think of itself as a credit company or a card company, but is actually in the “payment technology” business.

“Everything we do from a standards standpoint or from a design standpoint is enable choice and payments in a transparent and secure manner,” she said.

MasterCard Canada’s Sukhmani Dev says the company sees itself as a “payment technology” company and is always looking to make cards safer and easier to use. (Elevation Conference)

The magnetic strip is disappearing

The Instagram-style portrait orientation for the cards may add a touch of spice to the design, but the real reason for the change is what’s happening on the back, where tap-based vertical cards go above and beyond. of what is possible on older systems.

Unlike magnetic cards, touch cards are backed by a technology Dev calls “tokenization” because the credentials exchanged in a transaction are unique for that single transaction, making it much more difficult for a fraudster to intercept. all the data that would allow them to compromise an account and use it over and over again.

“If you lose your card, instead of having your Netflix canceled, we replace this sensitive 16-digit card information with a unique identifier, which the merchant can still use to complete a transaction, but it is not your number. 16 digits. ” she said. “It’s dynamic.”

In part because of a pandemic-fueled desire to avoid touching things where possible, Visa’s contactless credit card transactions increased by more than a billion worldwide in the first quarter of 2021 compared to the same period a year ago, according to Visa.

MasterCard phased out the requirement to have a signature to verify transactions years ago, and the company says it’s time for the magnetic stripe to go, too. From 2024 all new MasterCards will no longer have magnetic tape and the company expects the technology to disappear completely within a decade.

There are already cards with biometric technology out there, so instead of a familiar signature or swipe, don’t be surprised if your next credit card asks you for a fingerprint.

Go virtual

Beyond security, the shift to new card styles is a recognition that the digital world is playing a bigger role than ever in consumer spending habits.

Iconic Canadian retailer HBC launched a vertical credit card this year, which includes all the features customers expect in terms of reward points and fees, but also incorporates technology such as facial recognition for the wallet version. digital. , which turns a user’s smartphone not only into a virtual credit card, but also into a physical card.

All HBC stores are being upgraded to accept contactless payment options, the company said in a press release.

When Apple released its much-publicized credit card in 2019, the physical card was essentially an afterthought, as all of the card’s functionality was built into the customer’s Apple Pay-enabled devices. If someone wanted a physical card, they had to request one.

FirstData Debit Card Company Data shows that consumers with tap-to-pay cards tend to use their credit cards about 25 percent more than other cardholders, and spend more than a quarter more on them.

Accessibility improvements

There are other advantages as well. HSBC World Bank launched a vertical card this summer which has been praised by various accessibility groups for raising tactile points for the visually impaired, labels for how to use the card, and larger font sizes to ensure that card details are easier to read.

“Even something as simple as knowing which way the map is going can become a real challenge,” said Morven Lean, spokesperson for the British Alzheimer’s Society. says cards.

“These accessible cards are an important step in ensuring that people living with the disease feel supported and treated as equal members of society.”

It’s this desire to keep up with the times and better serve customers that is why the industry is always adapting, says Dev, which is why MasterCard believes the best credit card is the one the customer has. hardly notice.

“No one wakes up in the morning thinking how eager they are to use their card,” she said. “So we’ve constantly innovated in the physical card design space … moving towards what design actually works.”

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