Card Beginnings
60 years ago, a successful businessman named Frank McNamara dined with two of his friends in an elite New York restaurant. Since he did not have enough money to pay for dinner, he came up with a ground-breaking idea to pay for dinner using a piece of cardboard. That very same year, in 1950, he founded Diners Club with his friends – the first independent credit card company in the world. After founders persuaded restauranteurs, hotel owners and service providers to accept a piece of cardboard or a card as payment method, this service became so popular that Diners Club membership already rose to 420,000 people in 1951. Card is considered to be an easier payment method, and its worth is determined by funds available on its owner’s account.
Cards have decreased the risk of carrying cash and, as a universal payment method, they have made banking services available 24 hours a day. Cards have practically become a worldwide currency. Their scope of use is so widespread that Visa and MasterCard are now accepted at dozens of million locations offering products and services in over 200 countries worldwide. Today’s everyday life is practically impossible without credit cards. Special relationship is also formed when credit cards meet the internet, sort of electronic love affair. When shopping online, cards are just as simple to use as when buying in physical stores or using them at ATMs.
History of Payment Cards
History of payment cards starts in 1950s, when Diners launched their first charge card. After that, we saw a true expansion of card-issuing companies and their products. Here are some of the most significant events in card history:
- 1950 – Diners launches the first charge card
- 1958 – Bank of America launches the first bank card (Bank Americard)
- 1965 – Eurocard founded in Belgium
- 1967 – Interbank Card Association founded by American banks
- 1968 – Interbank Card Association (ICA) and Eurocard form an alliance
- 1974 – Eurocheque International founded
- 1977 – Bank Americard becomes Visa International 1979 – ICA becomes Mastercard International
- 1988 – MasterCard becomes a Eurocard International & EPSS shareholder 1992 – Eurocard, Eurcheque & EPSS merge into Europay International
- 2003 – Europay International merges with MasterCard International and becomes Mastercard International
This development of payment cards is only a summary of most relevant global events. Each country had its specific moments when it comes to history of payment cards. For example, national card schemes in USA and United Kingdome came about only after the international ones, while the order was reverse in most of other countries.
History of Erste Bank Cards
| 1994 | Banks enters into a joint venture with 23 other banks in order to develop an ATM network (MBNET) |
| 1998 | -we receive a full MasterCard International membership -this creates a potential for 500,000 clients who now have right to use international MasterCard cards. |
1999 |
-we receive a full VISA International membership, enabling us to use VISA and MasterCard national and international products at ATMs in MBNET. -we issue the first Erste MasterCard credit card, which was also the first MasterCard and the first revolving credit card in Croatia. |
| 2003 | number of card users has been increased significantly, number of card products also increases (MasterCard Charge and MasterCard Business cards), ATM and EFT-POS terminal network expanded thanks to successful merger with Riječka banka d.d. |
| 2004 | -we issue the first Maestro card with chip technology in Croatia. -we issue the first co-branding cards (MasterCard ELLE and MasterCard for Croatian Hunting Federation). -Visa Gold card issuing begins. |
2005 |
-Visa Classic card issuing begins. -MasterCard Business Debit card issuing begins. |
| 2007 | -we issue a new product for business entities in Croatia – Visa Business revolving credit card equipped with a new chip technology. -Business-to-Business (B2B) distribution card launched, for wholesaler transactions, replacing traditional payment methods. |
| 2008 | First drive-in ATM revealed, mobile ATM project launched. |
| 2009 | -credit cards and POS terminals migrated to Diners which, together with existing card portfolio, becomes a new company called Erste Club Card d.o.o., and takes leadership of the card market. -new security measures implemented for online card -Erste Maestro cards can be used for online shopping. |
| 2010 | -new debit card design introduced. -new Erste Maestro Plus service introduced, enabling users to withdraw cash at ATM and repay in instalments, and to use Maestro -NonStop zone opened in Zagreb, in Ilica 1, featuring self-services devices available 24/7. |
| 2012 | Maestro® PayPass™ card introduced, using the newest payment technology enabling contactless payment at points of sale equipped with terminals supporting contactless payment. |
| 2013 | Maestro PayPass™ Display card and Erste Display cards issued to clients using one of on-line banking retail services (internet banking service Erste NetBanking, mobile banking service Erste mBanking, Erste FonBanking). Together with existing features of Maestro cards, this enables us to provide a safer login service for on-line banking services, as well as a safer online shopping experience (SecureCode), since transaction authorisation is performed using a unique code generated on card’s display. |
All cards issued by the Bank are internationally accepted and used worldwide.
Card Types Available on the Market
- Credit Card – Bank card issued for a credit account approved by the bank, enabling delayed payment of purchased products via loan repayment. Erste Mastercard and Visa Classic cards issued by Erste Card Club belong to this group.
- Debit Card – Bank card issued for a transaction account which is immediately charged when a transaction is executed. This type are all cards that are currently issued by Erste bank.
- Cash Card – Bank card used exclusively to withdraw cash at ATMs or counters.
- Charge Card – Card for which total debt amount incurred by its use is covered immediately at the end of billing period (usually one month). Mastercard Business and Visa Business cards belong to this group.
- PrePaid Card – Card that needs to be “charged” by the client by transferring a certain amount which can then be spent at points of sale and self-service devices. Intended for smaller transactions.
- Co-branding Card – Card issued by the bank in cooperation with a partner company, thereby including best services both institutions have to offer. Co-branding card users have numerous advantages at their disposal (gifts, discounts, loyalty awards, prize contests, etc.), and are thus rewarded for each transaction that they execute.
Glossary
- Issuer – Bank issuing the card for client to use.
- Acceptor – Bank accepting the card at point of sale or cash withdrawal site.
- POS terminal – Point of Sale terminal, device at point of sale which reads the card’s magnetic strip and authorises the transaction by PIN entry, if needed.
- ATM – Automatic Teller Machine
- PIN – Personal Identification Number, four-digit number known only to card user who uses it to prove their own identity when executing a transaction at an ATM or a POS device.
- Authorisation – Query that checks the account’s balance when transaction is executed. For ATM and POS transactions, an electronic authorisation is performed, and for imprinter transactions, phone authorisation is required. For ATM transactions, PIN is also verified during authorisation.
- Business Card User – Legal entity performing registered business activities with headquarters in Republic of Croatia, using cards to pay for business expenses related to sales and services, and to withdraw cash in Croatia and abroad.
- Authorised Business Card User – Natural person whose name is printed on the card, listed on application form and for who limit is set regarding domestic and international expenses.
- SBT – Signature Based Transaction, transaction at point of sale equipped with a POS device or an imprinter during which user’s identity is not confirmed by PIN, but by a signature.
- PBT – PIN Based Transaction, transaction at point of sale equipped with a POS device or at ATM during which user’s identity is confirmed by PIN entry.