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Abtek is a state-of-the-art Credit Card Processing and Merchant Account Solutions provider. As credit card experts, we enable businesses big and small to accept and process credit cards, as well as delivering customized processing solutions to fit your evolving business needs.


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The History of Credit Cards, Part 2: Processing Before eCommerce

Today, sophisticated merchant services and mobile POS systems rely upon digital information transfers via the internet or phone lines. To those of us who have watched this technology develop, the existence of mobile merchant accounts that allow businesses to accept payments via smartphones from almost anywhere in the world almost seem like a miracle.

In order to get a picture of how far merchant services have come, it is interesting to take a look back at more primitive processes, which eventually evolved into the fast and worldwide credit card processing solutions that we provide to our current customers.

ABTK-small-blog-image-history2-01Early Manual and Semi-Automated Credit Card Processing Solutions

Most credit card transactions today are processed digitally by sophisticated electronic POS systems. Before that, accepting credit required quite a bit of manual effort, and most of the processes were at risk for errors and outright fraud. It may be that the development of reliable and safe electronic processes paved the way for the boom in worldwide credit card use by average consumers.

Store Credit Processing With Charge Plates

Before the 1950s, the ancestor of the modern plastic charge card was made of solid metal, flimsy paper or cardboard stock. Processing paper credit cards was an entirely manual effort with employees recording transactions and customer information on forms that got sent off for manual processing.

ABTK-small-blog-image-history2-02In the 1930s and 40s, some stores issued charge plates to customers, perhaps the first example of semi-automated processing. These were simply small metal plates with a customer’s name and address engraved on the face. When a customer wanted to use their credit plate to make a purchase, a store employee would run it through a small machine that used an inked ribbon, sort of like an old typewriter ribbon, to make an impression on a sales slip with carbon copies.

After filling in the totals, the employee would hand a copy to the customer as a receipt. In order to keep track of each customer’s debts and mail statements, the original form and other copies got retained by the store to be processed manually.

Customers were expected to visit the store or mail money to make prompt payments by the end of the billing cycle. Some stores employed “collection carts” that traveled door to door to collect overdue debts.

Interestingly, charge plates are not entirely worthless today; many collectors are interested in them for their historical or artistic value.

ABTK-small-blog-image-history2-03How Was the First Plastic Processed?

Even after plastic credit cards became common, processing did not change that much. Until a few years ago, many stores ran credit cards through small machines to produce an imprint on special forms. Copies of these forms still served as receipts and documents used to manually process and record credit transactions.

The biggest difference in the latter part of the 20th century, and early 21st century, was the that credit card processing companies employed data entry people who would manually enter information from these receipts into computer systems, instead of simply recording them in ledger books.

Abtek Moves Merchant Services Into the Future

At Abtek, we work with the latest innovations for safe, fast and reliable credit card processing systems. Though we provide the latest advancements in digital online payments, we also remember the past. One thing that hasn’t changed for our company over the decades is the importance of great customer service, which is why we treat every one of our valued merchant partners as if they are our only customers. Contact us to learn how we can improve your business and protect your bottom line.

Read more in this series:
The History of Credit Cards, Part 1: How Did People Pay Before Credit Cards?

The History of Credit Cards, Part 3: The Evolution of True Digital Credit Card Systems

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EMVs: The Future of Credit Cards Is Here

The serious data leaks suffered by Target and Neiman Marcus caused by hackers during the holiday season have re-energized the now long-standing question, “Are EMVs the future of credit cards?” US retailers are finally making the effort to catch up with the rest of the world.

Instead of leading the globe in innovation and cutting edge technology, the US has fallen behind in use of EMV (Europay, MasterCard, Visa) protocols. The recent breaches have magnified the security flaws in cards with magnetic stripes. These deficiencies have not been a “secret,” but obvious to all credit card issuers and manufacturers for some years.

ABTK-EMV-body-02EMV-Enabled Cards

With embedded computer chips and PINs, these cards are the height of security for retailers and cardholders. Credit card processing becomes equally secure, protecting both retailers and shoppers.

Commonly called “smart cards,” EMV-enabled cards use open-standard specifications to record payments on terminals programmed to accept them. EMVCo manages and maintains these protocols. EMVCo is owned by AmEx, Discover, JCB, MasterCard, Visa and other payment industry organizations, partnering as associates and technical consultants.

Where Are These Cards Now?

EMV cards are currently active for merchant services in an estimated 80 countries around the globe. Other countries not yet fully on stream with EMV smart cards, such as Canada, are in the process of converting to this embedded chip technology.

Instead of being the first, the US is one of the last countries to convert its mag stripe cards to EMV. In fact, EMVCo estimates that as far back as the fourth quarter of 2012, there were over 1.6 billion (with a “B”) smart cards active around the world.

  • Europe has over 95 percent of all payment terminals that are smart card active.
  • Canada and Latin America, including the Caribbean, have around 80 percent EMV-enabled terminals.
  • Even the Middle East and Africa have almost 80 percent smart card terminals.

ABTK-EMV-body-03Why the US Is “Late”

Those outside the banking and credit card processing industries often wonder why the US, typically a world leader, is so late getting to the dance? The delayed entry can be summed up in one word: volume. Migration to EMV cards in the US involves massive cost because of the number of magnetic stripe credit and debit cards, along with traditional and handheld POS systems, in circulation.

The merchant services industry and card issuers have been technologically ready for some years. However, the pure volume of mag stripe cards and terminals has generated the conversion delay. It was not until 2012 that major card issuers, such as MasterCard, Visa, AmEx and Discover, published strategies to perform the migration from magnetic stripe to embedded computer chip cards.
Since existing POS systems also need conversion, the cost of migration further increases for retailers of all sizes. Still, the benefit of using EMV cards and terminals remains indisputable.

ABTK-EMV-01Benefits

The benefits of EMV technology are impressive and well known.

  • Fraud prevention remains the most important benefit. The recent unfortunate events plaguing Target and Neiman Marcus, where so much plastic card sensitive information was compromised, emphasized this benefit beyond a shadow of a doubt.
  • Increased use of ecommerce, mobile merchant accounts and online payments are much more secure with EMV-enabled plastic cards. While the “best” hackers try to stay ahead of the curve, smart cards enjoy a uniquely secure reputation at the moment.
  • EMV technology offers detailed cardholder verification techniques, which provide online security that mag stripe cards do not. Using EMV cards minimizes the current problems of counterfeit, lost or stolen cards.

Credit Card Processors

This industry eagerly anticipates the future conversion to EMV technology. Industry insiders predict fewer errors, chargebacks and processing delays through the migration away from magnetic stripe terminals to EMV-enabled devices. The reasons?

  • Increased card authentication during the payment transaction protects cardholders from counterfeit card use by others.
  • Secure cardholder verification further protects merchants and cardholders against use of lost or stolen cards.
  • Use of card issuer determined permissions increases security of transaction authorizations, minimizing many potential problems.

Some US banks have started issuing EMV cards to customers. The process of total migration will take some time, requiring the patience of the industry, cardholders and merchants. The resulting huge decreases in fraud losses will be worth the wait, however.

Since most current EMV cards also have a mag stripe, travelers from the UK and other EMV countries can use their credit and debit cards at US retailers until the conversion is complete. While issuing only chip-enabled cards is under discussion in Europe, for the foreseeable future, most international travelers should encounter no problems using chip and mag stripe cards in the US.

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The History of Credit Cards, Part 1: How Did People Pay Before Credit Cards?

It might be difficult for consumers, and especially for those involved in sophisticated credit card processing systems, to understand how business got done before credit cards became a pervasive part of life. Of course, this pre-credit card period in history occurred before the internet. Nobody had to worry about safe online payments because ecommerce did not yet exist.

Even now, older generations will probably remember paying for a lot more goods and services with cash and checks in the past, but the concept of credit cards has actually been around for a long time. Certainly, the idea of credit existed for centuries, but it was more associated with specific merchants, unusually large purchases or businesses.

A Short Prehistory of Credit Cards

According to Credit Cards and Payment Efficiency, written for the Federal Reserve, almost all consumer and business purchases were paid with cash and checks during the early to middle part of the 20th century. Some of the first developments that paved the way towards modern credit cards include:

  • Proprietary store charge cards: Early 20th century
  • Gasoline cards: The 1920s
  • Entertainment and travel cards: The 1950s
  • Early bank cards: Late 1940s to 1950s

Proprietary Charge Cards

By the early 1900s, and even the late 1800s, some stores might issue charge cards, coins or tokens for customers to use only in that specific business. These were mostly processed manually, and debt was tracked in a paper ledger. Some larger stores did have a sort of press machine that made an imprint of a charge plate or token, but this still did not really qualify as automated processing.

The first proprietary store cards in the early 20th century did not represent revolving credit as debts were due at the end of the billing month. In fact, some stores hired companies that collected overdue debts by parking in front of customer’s doors with trucks or wagons that had very striking painting on the side, clearly marking them as debt collectors. Since neighbors could see these trucks, embarrassment seemed to be the primary method of enforcing timely payments.

ABTK-small-blog-image-history-01Service Station Gasoline Cards

In the early 1920s, oil companies issued paper courtesy cards to vehicle owners to encourage brand loyalty; this may have been the origin of consumer revolving credit. These were usually limited to a specific brand and even to a specific geographic area, so they couldn’t be used for traveling.

Travel and Entertainment Cards

By the 1950s, more general travel and entertainment cards appeared. Diners Club introduced their card in 1950, and it was the first time that consumers could really use their credit card outside of their own local area, and with any merchant who accepted the cards. American Express issued a similar travel and entertainment card called the “Green Card” in 1958. The bills still came due at the end of the payment period, so these did not represent true revolving credit.

ABTK-small-blog-image-history-02These were also handled very differently than the merchant services that businesses rely upon today. For one thing, it was a “closed loop” system where only the card issuer settled accounts with both consumers and merchants. Also, electronic POS systems did not exist, so all transactions got documented with paper forms and copies that had to be sent to the credit card company for processing. Security was still an issue because these paper forms could get lost, forged or have totals changed during processing.

Early Bank Cards

In the latter part of the 1940s to the 1950s, some banks began issuing their own cards. Typically, cardholders had to have an account with the bank. Also, merchants had to sign up with each individual bank in order to accept the cards, and these were also usually only accepted within the limited geographic region that the bank served.

The Future of Credit Card Processing and Mobile Merchant Accounts

At Abtek, we have worked on the cutting edge of worldwide credit card processing technology since 1986. If you value security, integration and reliability, partner with us as your credit card processing solution of the future. We combine the latest in technology with old-fashioned customer service to deliver value for our merchant partners.

Read more in this series:
The History of Credit Cards, Part 2: Processing Before eCommerce

The History of Credit Cards, Part 3: The Evolution of True Digital Credit Card Systems

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How to Choose the Best Merchant Services Provider for Your Business

Without having the ability to accept credit card payments and other payment options, even the best retailers can’t expect to stay in business for very long. These days, consumers have more payment options at their disposal than ever, and they expect to be able to use any of them when making purchases online and in brick-and-mortar stores.

At Abtek, we understand how confusing it can be to find a company that provides affordable, secure, effective credit card processing options and other essential services for merchants. From accepting online payments to being able to reverse chargebacks quickly and easily, there are lots of things to take into consideration.

Seven Things to Consider When Shopping for Merchant Services

  1. ABTK-small-blog-image-01Pricing. Yes, pricing is important. No one wants to pay more than they should for their ecommerce and merchant account needs. Still, pricing shouldn’t be your one-and-only motivator when looking for a provider. POS systems providers often lure people in by advertising rock-bottom rates. All too often, though, the rates aren’t all-inclusive, and you end up getting nickel-and-dimed in the long run. Furthermore, it’s far better to pay a little more for processing that’s truly effective, reliable and secure than it is to save a few bucks and end up with something that falls far short of delivering the quality you need and deserve.
  2. Flexibility. If you’ve ever dealt with credit card processing companies before, you already know how important this factor is. Many providers are only set up to deal with small businesses, for instance. If your needs change, evolve and grow – which they will, with any luck – the last thing you’ll want is to have to find a new provider. In other words, the provider you choose should offer flexible, scalable solutions. You may not be interested in mobile merchant accounts now because you do the majority of your business in your store. What if that changes, though? Having to switch is a major burden, so choose a provider that offers flexible, open-ended solutions.
  3. Transparency. This tends to be a major issue in the industry. As mentioned previously, it’s not unusual for providers to advertise seemingly low prices only to turn around and charge all kinds of extra fees later. You shouldn’t be in the dark about a provider’s prices or capabilities, and you should know exactly what to expect when it comes to things like fees, conditions and rates.
  4. ABTK-small-blog-image-02All-In-One Solutions. Don’t let anyone tell you that you’re going to have to use different providers for different needs. There are plenty of all-in-one providers out there. Finding a single provider for everything from virtual terminals to credit card storage is perfectly doable, and it’s much more convenient to have everything delivered by a single company. Even if a provider is only lacking one service you need, you should cross it off your list and move on.
  5. ABTK-small-blog-image-03Security. Nothing can ruin a company’s reputation like a security breach. Whether you’re mostly interested in POS systems or in online payment processing, the provider you choose should make security a top priority at every level. Don’t settle for a generic promise about security, either. Dig deeply, and ask for details. How exactly will your online payments and other services be kept safe and secure? What measures does the provider take to keep your information and your customers’ information out of the wrong hands? There should be no doubt in your mind that the provider takes security seriously.
  6. Reputation. In this day and age, there’s no excuse for not fully vetting a company that provides merchant services. Your first stop should be the Better Business Bureau website. Find out what the provider’s rating with the BBB is and whether any complaints have been filed in the recent past. Perform an online search to look for reviews from everyday business owners regarding the company in question. What does the general consensus seem to be?
  7. Specialization. Finally, pay attention to the kinds of companies that the provider has helped in the past. Ideally, choose a provider that has a proven track record for helping other companies in your industry.

As eager as you may be to find a great merchant services provider, don’t rush the process. It’s far better to take your time and make the right choice now than to backtrack and have to find yourself back at the drawing board. With these tips in mind, zeroing in on the right provider should be fairly easy.

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