New technologies, as a general rule, build upon not just current developments, but on the extensive analysis of how related technologies have been evolving over time. Thus, if we look at a bank card as a complex piece of technology, which it is, it is interesting to know the history behind it, understand how bank cards evolved over a hundred years, particularly for us, as we at Smart Engines are working on bank cards recognition systems, we are not only constantly looking for ways to improve them.
In today’s world, an instant payment performed with a bank card, or its electronic version in the mobile device will hardly surprise anyone. However, a bank card as a plastic or metal object continues its development journey independently. What might be surprising though is that a bank card was developed way long before the World Wide Web (www), and its embossed design with raised digits aimed at forgery protection and aesthetic reasons, was used to create the first prototype of the technology for the automatic input of personal data.
How a bank card and jewelry case are related
The first prototypes of payment cards were developed at the beginning of the 20th century and were made of cardboard; they were not too wear-resistant, but their durability was not a requirement at the time as they were not meant to be inserted into ATMs or other reading devices – only presented when making a purchase in a store, cafe, or a gas station. It was still too early to talk about some kind of integration of the card with a banking IT system: the only thing a card was meant to do was to identify its owner and indicate his/her solvency – what loyalty cards are meant for today.
In the early 1920s, payment cards have started to be widely used in the fuel trade. In 1924, the General Petroleum Corporation in California began releasing what they called “courtesy cards,” and gas station chains throughout the United States have echoed similar practice – they were issuing payment cards made of cardboard to their regular customers. The card allowed paying for petrol and buying something at the convenient store by the station, the latter being located in places around the country, and this enabled to retain the client, who was traveling around the states with his/her car.
As a result, bank cards started to get used much more often than, say, a passport, thus they had to be replaced quite often after quickly wearing off. This was inconvenient for both organizations that issued the cards, and the customers. In 1928, the Boston-based Farrington Manufacturing Company, specializing in engraved metal jewel cases, released a prototype of the first metal loyalty card, and called it Charga Plate. It quickly became popular with retail chains.
Embossing as a step towards artificial intelligence
The embossed owner’s personal information allowed imprinting the buyer’s card on the receipt with a special printer, to confirm the payment when making a purchase. Embossing simplified and accelerated the interaction between the buyer and the seller, as it eliminated the need for the seller to manually fill out the sales receipt and enter the buyer’s data into it.
Innovation, as the promo ad for Charga Plate claimed, saved time on spelling out the name to the seller, allowing identifying the customer in any store, and reduced the likelihood of errors when filling out the delivery and billing address. Charga Plates were used up until first credit cards were developed, and now can only be bought at the auction. Here is a sample of the card from those times, which for some reason has never been used.
The principles of bank card recognition are based on what we call today OCR, or the Optical Character Recognition, the history of which began with the development of technology for manufacturing patented embossed metal tags. This was succeeded by the development of the first manual embossing device, followed by the development of the method of engraving metal plates, as well as the device for printing on a slip, the latter being patented as well, along with the OCR signature Farrington OCR 7b font.
Today, cards with the owner’s name and individual number stamped on them are normally used in places where the development of trade is ahead of the development of information technology. In those cases the same old method is still used: the card has to be “rolled” in a specialized device that leaves a print of the data on a paper slip. The cardholder leaves with the purchase, and the seller authorizes the payment by phone.
Chip is not a luxury
The bank cards developed in the middle of the 20th century represented a more complex payment tool, which served not just to identify the client, but also provide the seller with information about the status of the customer’s bank account, and had to ensure the money transaction happens as quickly as possible. The first special magnetic strips, and later electronic chips, helped to provide faster interaction with the cash machine.
From then on, the design of the card has not really changed much: they are still around 55 * 90 mm in size (the exact standard is 85.6 X 53.98 X 0.76 mm). The requirement for the details written on the bank card remains the same too, which is the owner’s name and the number of the card linked to his/her bank account. The number of the bank account encodes the payment system type, the bank identification number, and the customer’s personal number.
The card’s number should conform to the ISO 7812 international standard, and in most cases consists of 16 digits – the most common payment systems, such as VISA and MasterCard support this standard around the world. In some cases, there can be 19 or 13 digits.
Does the card number mean anything?
The first 6 digits of the number indicate the issuing bank unique number – Issuer Identification Number (IIN) or Bank Identification Number (BIN). Number 3 means that it is either Diners Club – the founding father of credit cards, or American Express, or the Japanese JCB paying systems. Number 4 indicates the card belongs to the VISA system, 5 – MasterCard (or Diners Club in the United States and Canada). 6 – Discover, Laser, or InstaPayment payment systems.
Digits from the 7th to the 15th are the Account Number, which is unique to each client.
The last digit is the checksum, calculated by a certain algorithm, and allows to verify the correctness of the entered data.
Front side of a bank card
The name and surname on the front side of the card are normally typed in Latin characters in international transcription and can be sometimes duplicated in the national language. Card’s validity date is also indicated on the front side of the card. The first 4-6 digits that are displayed on checks and payment receipts are duplicated under the first four numbers in “OCR 7b” font. Other information may also be indicated on the front of the card to simplify the identification of the card.
Backside of a bank card
The backside of the bank card contains a verification code, referred to as CVV (card verification value) in the VISA payment system, or Mastercard CVC (card validation code). Cards are also protected by some additional technology, however, these layers of protection are losing their relevance with the development of multi-factor authentication.
When Electronics is not much of help
Automation of the interaction between bank cards and payment terminals allowed banks to move away from embossing when issuing mass-use cards, by simplifying the process of personifying the plastic card while expanding the possibilities of its electronic filing.
Today, the magnetic stripe on the card is duplicated by an electronic chip and/or contactless NFC (near field communication) module, and it allows the interaction with the terminal without the need to insert the card into the reader. Thus, client details are placed on cards using a less expensive method, than embossing, such as laser printing, engraving (indent cards), and flat printing (flat printed cards).
With the evolution of remote mobile payments, where interaction by chip is impossible, there is a need to develop and improve automation technologies for entering card data into payment systems. The card again, like 100 years back, becomes a carrier of visual information relevant to the payment, however now it simplifies data entry into the system more for the client than the seller.
Code Reader, the modern technology for recognition of bank cards, automates the extraction and input of bank card details, like the first mechanical machines that left a stamp with bank card details on a slip. The system finds and recognizes the number, expiration date and name of the owner on cards of various formats and various types of printing.
Custom-made cards: simply marketing or something more?
Bank cards have become something that billions of people around the world use on an everyday basis, multiple times a day. The bank card market is developing independently, and therefore banks are trying to attract customers issuing cards that are significantly different from those of competitors.
Despite the complexity of electronic identification systems for bank cards, visually they can’t be significantly different from one another. To attract the client, and emphasize their premium status for the bank, banks started to issue non-standard cards using a special color or design solutions, such as mirror surfaces, different textures, lamination, and foiling.
New manufacturing materials went it – transparent, textured plastic, metal cards – just like 100 years, but from more expensive alloys than copper. Some banks issue non-standard size cards, or place the details differently: in a vertical orientation or on the back of the card.
All this certainly has a positive effect on customer acquisition, however, it makes it challenging to process such cards. Code Reader is being taught to cope with card recognition difficulties associated with unusual materials and with non-standard location of details, and other artifacts. The system is able to find the relevant information fields even if you hold the card upside down.