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The Technology Behind Payment Cards – Part 1

By Industry Insider | Published July 6, 2012 | Google+

Pause for a minute, the next time you open your wallet or purse at home, and examine the contents. Like most peoples’ yours probably contains a mixture of cash and cards, some receipts, notes or other memory aids, the odd photograph and some lint of unknown provenance. Firstly, look at your cards. Actually, probably firstly get rid of the lint, you’ll thank me for it, but then look at your cards.  Your money is all similar; it shows a denomination, some dead people (some of whom are important historical figures, and some of whom are Grover Cleveland) and maybe a building or an animal or two. Your photographs show loved ones or the occasional nemesis if you’ve attended a therapist recently. Your notes and receipts serve as reminders to you (though sadly not as to where you’ve put them). The point of all these is that their content is by and large static. Yes it differs from individual item to individual item but the purpose of the content remains the same.

Your cards, though, are different. And serve different purposes; some replace the money you carry in certain situations, some serve as identification, some perform functions unknown to you (and indeed to the rest of humanity, other than to your Uncle Fred who bought the thing for your last birthday). But irrespective of function, they share common components. Yes, they’re card like; but other than that. Most of them will have a magnetic strip, some will contain microchips, some will have a photograph (usually but not necessarily of you), some will have a QR code. And that’s just in an average wallet; if you have some more of the modern cards they may contain RFID chips, encoded biometric data, personalized images, personal data of other kinds and even (albeit in extreme cases) micro GPS or Bluetooth modules.

The goal of this lengthy preamble, other than to get in an increasingly uncommon Grover Cleveland joke, is to point out that your cards may differ in purpose but more so than anything else you keep near you other than a smartphone, share technology.  And we’re living in a world of increasing technological pace of change, not just in physical terms, the chips, magnetic stripes and electronics, but in terms of the changing environment to leverage their abilities. Ever since the advent of the transistor in the late 1940s technology has been changing our world ever more quickly, but particularly since the turn of the last century it has been increasingly focused on the minutiae of our daily lives.

Over the coming weeks I’m going to be discussing the impacts, and limitations, that technology is having on the payment industry in general and the gift card industry in particular, with a focus on our new Giftcards Local undertaking. The impact isn’t only technological, it’s social and cultural too and often the latter two present more challenges than the raw technology.  As does lint removal.

~~ Mike Allcock, Former Systems Administrator for

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