Evolution of Plastic currency

Evolution of Plastic currency

Evolution of Plastic currency

The world in today’s time has been deeply influenced by digital technology ranging from smartphones to the Internet inside cars. The wave of digitisation has touched each industry sector and all individuals whether children or adults. One of the most iconic influences of the digital age has been seen over the global banking sector, what started in the form of barter system is now moving towards cryptocurrencies and NFTs. Our societal structure is deeply influenced by the monetary aspect and in recent times we have seen that a global wave of digital banking has taken the financial world to a new level. In the year 1857, Edward Bellamy for the first time mentioned credit card system in his Utopian novel ‘Looking Backwards’, although this referred to a card for spending a citizen’s dividend from the government, rather than borrowing, making it more similar to a debit card. As we entered the new century in 1914 Western Union was the first bank to open a ‘Charge Account’, this was the first official advent of the credit system in the financial world Under this account one could make payments to shops in terms of store credit. 

Further more into some decades in 1950, Diners Club also opened their Charge Accounts and directed them towards travel and entertainment industry, this expanded the scope of Charge accounts into new and evolving industries. During this time the world was coming out of the economic recession caused due to the world wars and hence the system of credit accounts was fundamental in strengthening the global economy and banking systems. 

In the year 1957 the global banking giant American Express made its revolutionary move to introduce plastic credit cards and Point of Sale (PoS) machines which has since its advent completely changed the day to day banking services. This invention has been so influential that the banking world is still upgrading and using this technology. Furthermore a decade later in 1967 another giant of the banking world- Barclays bank opened the first ATM (Automatic teller Machine) at London and the same was the first ever opportunity for the people to withdraw money from machines instead of banks, this advancement complimented the plastic cards as both of these techs were the key pillars of the evolving banking system.

 In the current century the world has become fast paced due to the use of internet and the same has been seen in the banking systems which have moved on towards new technologies like digital wallets, cryptocurrencies, UPI and gateways like – Amex, MasterCard, VISA, Europay, Rupay etc. Even in this digital century the plastic credit and debit cards have not lost their significance and still continue to influence the banking world. The plastic cards or plastic money have gone through an evolution of themselves in order to make banking tech more user friendly. What started as a plastic card used to have a magnetic strip at the back of it which contained all the information regarding the user and his bank and the same was used on a PoS machine to make the payments. This technology caught up quickly in the fraudster and scam circles and posed a huge threat to protection of banking details. Pertaining to this threat the developers added  the protection of a pin to the card in order to maintain a secure and user based payment system, in the initial phase the cards were protected by a 4 digit pin which had nearly 10,000 different combinations thus failing the fraudsters to cheat, lately the cards have a 6 digit pin which has 100,000 combinations. 

The plastic currency has been in existence for a long time and it was seen that a modus operandi to scan the megantic strip of cards was adopted by fraudsters in order to gain access to the banking details of an individual. This was overcome by the addition of a secure chip in the cards, now the chip contained the banking details and was also faster in processing payments as compared to its predecessor. So now the card had a magnetic strip, a chip and was protected by a pin. In the current time the cards have evolved to be able to process payments through the wifi, hence now what began with scanning of a magnetic strip can now be done with a single tap. The  advent of the credit cards and evolution of the banking industry has been iconic as it has witnessed major changes in a short period of time and will continue to evolve with time. 

As we now know about the advent and evolution of credit/debit cards, let us now see  ways to protect yourself against contactless payment crimes and scams-

  • Where you store and physical security of the Cards: The Storage of the Card and the Handling of the “Contactless Cards” need to be done with caution. The fact that the card comes in contact with PoS without consent is a threat. Malicious intent of bringing a PoS Machine to a Card held in a bag or a wallet or pocket, is a matter of concern. Also, that the “Contactless Cards” transaction can be completed without punching a PIN, is also a matter of concern. The Card does provide a lot of convenience, but it also has its own risks.
  • Invest in a RFID-Blocking Wallet: The Contactless Cards also need to be protected from ‘Consentless Card Reading’. There are Carry Pouches and Bags which perform blocking of the Card from being read over WiFi of the RFID. One can purchase them and carry their card in them. The usage of the card can only be done, when the Card is out of the RFID-Blocking container.
  • Use the Banking App that allows management of the Contactless feature: A ‘Contactless Card’ issued by a Bank, should also be provided and managed through a Bank Provided App (for Mobiles). Insist on an App from your Card Provider, that allows you to manage the “Contactless Cards’ ‘ features; like ‘setting of monetary limit per transaction’ or ‘disabling of the WiFi’ or ‘allowing management of limit on the WiFi based transaction’, etc.

Thus we should always be on the lookout for potential financial scams because as the banking world evolves so evolves the crimes pertaining to it. Following basic cyber security protocols can 90% negate the chances of a banking fraud for an individual.

STAY SAFE, STAY SECURE

Author – Mr. Abhishek Singh, Research Associate – Policy and Advocacy, CyberPeace Foundation

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