How Credit Cards Were Invented | Planet Money | NPR

Ever wondered why the chip on your credit card made it slower — or where the chip and stripe on your credit card even came from?

Here's the story. In the mid-'60s, the airline industry had a problem. The 747, the first real jumbo jet, had just been introduced. There were more passengers at the airport than before. More passengers meant longer lines. And that was especially bad because this was the era when customers paid for their tickets right there at the airport — often by credit card.

Back then, paying by credit cards was a whole ordeal. The airlines had to call up the bank manually in order to confirm the card. With lines growing, the airlines needed a faster process. So they called IBM to ask for help, and that's where our story (which also features some French fraudsters and a hippie inventor) begins.

Host
Alex Goldmark

Originally Reported By
Alex Goldmark
Julia Longoria

Producers
Bronson Arcuri
Ben Naddaff-Hafrey

Editor
Bronson Arcuri

Animation
Marcie LaCerte

Cast
Alex Chen
Nick Fountain
Camilla Franklin
Alex Goldmark
David Gorsline
Ryan Kellman
Kenny Malone
Colin Marshall
Julia Melfi
Nick Michael
Ben Naddaff-Hafrey
Stephen Thompson

Series Creative Director
Mito Habe-Evans

Consulting Producers
Alex Goldmark
Robert Smith
Bryant Urstadt

Executive Producer
Keith Jenkins

Special Thanks To
TWA lounge at 1WTC by TWA Hotel
Marquet Patisserie

Archival Media
Prelinger Archives

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[alaintruche]

credit/debit card chip is only annoying in the US. Works great and fast anywhere else.

[throttleblip]

In short US was late to the credit card security game...now the hackers just go directly for the individuals based off the million data breaches

[felinecontrolled]

A small business owner told me that when the new chip requirements were enacted, they had been given more then a year to comply. The problem is that you have to buy the chip/card reading device separately from the actually software to make the device work. Not all devices are made the same and they are not 100% compatible with all software. This is why some devices are unsecured, slow or simply don't work. So America took a system that works great elsewhere in the world and privatized it for profit over functionality.

[MatthieuVlogs]

I'm so glad I've found this as well as the Podcast...absolutely love the quirkiness and effective story telling of these videos!

[frankantonio]

Came here because of the podcast. I have been listening for years! This is a great venture! Hope to see more of these.

[gskyon]

A funny thing my Japanese teacher told me: Here in Brazil, due to high crime rates and too much fraud, banks have some of the best card systems in the world, pretty much everyone has a debit card, everyone can pay delivery boys with credit card anywhere, you can buy a loaf of bread and pay using your card. And public transport has their own cards aswell, in some cities the buses dont even accept money. On the other hand, Japan being extremely safe, has no need for cards, everyone still uses money everywhere, so when he went there, he was completely lost. He simply didn't know how to act. Their culture is so different, he made a fool of himself several times, the Japanese enjoyed it thought, seeing a foreigner so confused and lost by their traditions.

[virginiamoss]

What's annoying about chips; they are faster and you don't have to sign.

[btgrant]

This video is the most fun the internet will grant me today. Thank you!

[np]

After working in retail for years...the chip is sooo much slower, plus our transactions are timed. It could also be because American systems are not up to date. Plus many stores have yet to install chip ready devices/software. But whatever...checks are still the least desirable.

[Mphotoandvideo]

why not mention of the manual machines that would take a carbon copy of the credit card? That was how it was done most of my childhood (d.o.b 1984)... I wanna say late 80's is when they would swipe and get actual approvals at stores.

[melodramatic]

I was just in the States last week and the chip worked faster than the strip. I guess the US finally caught up with the rest of the world...

[llamahunter]

I want a “pop up video” version of this with the names of all the staffers.

[mrmindstorms]

Wait, so what is annoying with chips?

[chuckdieselkicksdisks]

I love this fun way of learning about cc

[jackinkc]

a little short on accuracy, facts, context

[veemon]

Now there's a tap feature on some cards!

[aznandyroo]

Who knew Kenny would make such a good French villain!

[-.._.-_...-_.._-..__..._.-.-.-]

Could have used more cigarette smoke, but this was really really good.

[vinrod]

"Where we are today"? Really? I pretty much only use contactless payments, you don't have that in the states or what?

[Squeeonline]

You seem to be implying that chip transactions are slower than magnetic ones, but I guess this isn't true.

Also chips allow for NFC/tap to pay which is the best thing ever for card payments.