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Interesting Facts About Credit Card Processing

Interesting Facts About Credit Card ProcessingDid you know the credit card is almost 100 years old, with the first being issued in the 1920s? These early examples were location-specific charge cards that could be used only at the gas stations or hotels that issued them. 

Want another fun fact? Here’s one. Credit cards were originally made of cardboard. 

Obviously, much has changed over the past century, with credit cards going from a fringe concept to a global phenomenon. In fact, there are currently 14.4 billion cards in circulation. In a world with about 7.5 billion people, that’s approximately two cards per person (on average).

With that much coverage, interesting facts about credit card processing are bound to emerge. Let’s take a look at some of the coolest ones. 

Neat Facts and Stats About Credit Card Processing

Here are some mind-blowing statistics and tidbits: 

  • The first truly universal credit card was introduced by the Diners’ Club in 1950. Unlike with previous versions, these cards could be used at multiple locations. 
  • In the early days, most credit cards were actually “charge” cards, balances of which had to be paid in full every month. The concept of carrying a balance from month to month (aka revolving credit) didn’t come along until 1959. 
  • If you laid all credit cards of the world side by side, you could span the planet more than 3.5 times. 
  • The average customer acquisition cost for credit card companies is about $80 — once you factor in marketing and administrative expenses. 
  • Credit card users spend more (per transaction) than their cash-carrying counterparts. According to recent studies, the average credit card purchase is 12 to 18 percent higher. The reason is not entirely known, but it probably has to do with the “pain of paying.” Like tokens, casino chips and other substitute payment options, credit cards help reduce this pain since the user isn’t spending actual.
  • Chargebacks (aka friendly fraud) results in over $7 billion in merchant losses every year. By 2020, that number is expected to reach $28 billion. For tips on reducing chargeback fraud in your store, check out this excellent article. 

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  • In everyday parlance, a deadbeat is someone who doesn’t pay his/her bills on time. In the credit card industry, deadbeats describe those who pay off their entire balance every month. Banks don’t like financially responsible card users since they don’t pay interest (or generate profit). In fact, deadbeats often cost banks money if they qualify for rewards and cashback incentives. 

Want Even More Credit Card Processing Facts?

If you’d like to learn more about credit card processing (including all the steps involved), we’ve published a companion article here.

Learn More About Credit Card Processing

Topics: Fun Posts, Payment Trends

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