Information Technology Reference
In-Depth Information
In 1966, Bank of America entered the credit card world by forming BankAmer-
ica Services Corporation. The business idea of this unit was to franchise credit
cards to hundreds of banks nationally and internationally. This would soon lead to
the Visa card.
Also in 1966, another group of banks formed the InterBank Card Association
(ICA). This group issued MasterCard credit cards, which competed directly with
Visa.
Both the Visa and MasterCard services opened the gates to interbank transfers
and cooperation between member banks. These cards were popular, so smaller
banks began to issue credit cards. Eventually, hundreds of companies, such as air-
lines, retail chains and, in later years, web companies such as Amazon, issued Visa
or MasterCards in their own names.
The magnetic stripes on plastic cards not only created the modern credit card
business, but they soon proved useful in other areas. For example, many door
locks (usually used by hotels) are now opened by use of magnetic cards.
Note
Alarmingly, the Congressional Cyber Caucus sponsored by Con-
gressman James Langevin of Rhode Island reported in December
2012 that a hacking device for magnetic-lock hotel doors has sur-
faced, and this has been used in thefts of computers and personal
property from rooms at several major hotel chains.
Needless to say, the rapid expansion of credit card usage was mirrored by a rap-
id expansion of computer capacities and software applications to process the card
payments. Because small banks could not afford their own software groups, third-
party companies got into the credit card business as service bureaus or outsourcers
who ran or developed credit card applications for banks that did not have the ca-
pacities themselves.
Automation and New Professions
1960 marked the introduction of the IBM 1401 computer, which for 10 years was
the dominant business computer and would greatly expand software from its sci-
entific and military origins into the business world. In 1964, it was joined by the
IBM System/360 line, which would become the most popular computer line in his-
tory.
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