Nightcafe AI image generated to show women working in a 1960's office

More Backwards Banking

I regularly post here about how backward, slow and relatively useless the American banking system is. This post is another in that series, but one that potentially impact’s you every time you use your bank or credit card. How so?

This week I received my new MBNA (UK) Credit card. I have both a UK credit card and Bank debit card from FirstDirect. Here they are.

When I got the first card, I thought the redesign with no visible numbers on the front was odd, and thought no more about it. A couple of weeks ago, my local King Soopers grocery store added video cameras above the self-checkouts(see below). Circled are all the camera’s I could see. I assume this is a theft protection issue, and nothing more. However, each one of those camera’s has a clear view of the contactless payment point.

When my MBNA card arrived, the penny dropped. Every time I use my US Chase bank debit card, every freaking time I use contactless payment with my brand new CHASE debit card, or my CapitalOne credit card, my full name, and full card number and expiration date can be captured by any 4k/HD video camera that is positioned to see the front of the card and the contactless payment point. It’s also very likely the camera’s can capture the pin number if used.

This picture sums up the problem, the laugh is it’s actually courtesy of MCB Bank in Mauritius, promoting contactless payment. The numbers would be easily seen on a video. You have been warned. When US magazines and websites reported on the trend to put numbers on the back, they completely missed the video surveillance aspect.

Embossed, Raised Numbers, Why?

If you are reading this and were born after 1985, it’s very likely you have no idea why your cards have embossed, raised numbers on the front of the card.

Well back in the “good old days” if you paid by card, they actually ran your card through a machine that looked like this, and had three pieces of paper with carbon copy paper between two layers. One copy for you, a copy for the merchant, and a copy for the card issuer.

How The Numbers Used To Be Used

One of the projects I worked on at Chemical Bank in New York City in 1984, actually automated another step in the process. In the 1980’s, any amount above the “floor limit”, a monetary amount usually between $5 – $20 depending on the merchant, the sales person would take your card and call the issuer and read out the card number; at the other end would be someone with a large thick computer printout of all their lost, stolen and fraudulent cards, as well as those that were more than 30-days late.

If you were on that list, your purchase would be declined, and again based on the issuer, your card may be confiscated/retained by the merchant/retailer.

Many card issuers, including my new bank are still issuing debit cards with raised numbers on the front in 2023. WTAF!

In 1984/5 it was simply unaffordable to do real-time transactions to lookup a credit card status, besides most retailers were still using manual cash registers that didn’t have a display unit. Instead they made a phone call and read out the number.

Each night the bank printed 300+ copies of the fraud list on massive IBM 3800 laser printers and distributed them to an office full of women(for it was then) who received calls and looked up the numbers.

To replace that, we just connected the lines to an IBM Series/1, the number would be entered by keying it in using the telephone dial-pad; the Series/1 decode the DMTF tones from the keypad into numbers; validate the number and then would do a simple lookup in a digital version of the listing for the card number, if it wasn’t found, but was a valid number it would be authorized. None of that went anywhere near the transaction processing system and database. It did though capture the transaction amount.

Since the mid-90’s real-time account balance and details have become affordable on a mass scale. Now when you use swipe, pin or contactless card, every charge over the floor limit is checked in real-time, no people involved except you.

Interestingly, the transaction debit still doesn’t happen in real-time in the USA, that’s why if you jump on your credit card or bank website to check the status, the transaction will show as pending until they run the overnight batch reconciliation. Each bank has it’s own rules about how much, and how soon they credit or debit your account from the transaction.

The banks actually have the balls to charge extra for high-end cards that don’t include the numbers on the front and do debit and credit more quickly and more frequently. Go figure, the USA banks making money out of inefficiency and insecurity.

My advice, if your bank sends you a card with embossed, raised numbers on the front, return it and refuse to use it. If you can’t do that, make sure that when you hold the card against the contactless payment point you use it front-down. I’m going to raise my concerns with Chase, since I opened my account with them in December and they sent a debit card in January that has embossed numbers on the front.

One thought on “More Backwards Banking

  1. Great trip down credit card usage memory lane. It almost seems to me, Mark, the credit card companies could care less about credit card fraud. It would seem as fraud increases the card companies make it even easier to generate fraud. It bogles my mind!

    Thank you for such a detailed and comprehensive report. And for your suggestions of how to resolve these issues. Including and not limited to – just don’t use them! While I was working in the retail industry for two and a half years I was surprised at the number of people who are using cash. Many farmers preferred to use cash. And some of these purhases for cattle, hog, and chicken feed were in the thousands of dollars.

    Probably better not to get me started on how retail drives credit card metrics. Getting people to sign up for credit cards is the number one metric in stores. Even higher than actually driving sales. It made me shake my head. At any rate I like the idea of just cutting them up credit cards.

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