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Transit as Weathervane

For the first decade or so, it was far from clear whether the credit card was continue to exist as a product at all, and as late as 1970 there were people predicting that banks would abandon the concept completely. What changed everything was technology: the introduction of the magnetic stripe and Visa’s BASE I online authorisation system. This changed the customer experience, transformed the risk management and cut costs dramatically. Everything changed with automated authorisation.

I can’t resist pointing out that it was the London transit system that pioneered the use of magnetic stripes on the back of cardboard cards in a mass market product (seven years earlier, in 1964). The first transaction was at Stamford Brook station on 5th January 1964, well before BankAmericard (the precursor to Visa) introduced their first bank-issued magnetic stripe card in 1972 in conjunction with the deployment of the BASE I electronic authorisation system in 1973.

As I wrote back in 2008, setting out “I have seen the future, and it is the London mass transit system” theory of payments, we should look at what they were doing to see what banks would be doing in a couple of years time and what they were doing, of course, was contactless, which now accounts for X in Y card payments in the UK. I was reminded of this b

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It’s no exaggeration to say that TfL’s technology has transformed the payments industry, and contactless is quickly becoming ubiquitous

From Digital Currencies And Credit Cards Have Subways To Thank For Their Existence.

 

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Now I read that Hong Kong MTR, where it all kicked off the with contactless Octopus card, is going to tender for a QR code solution.

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