History of Debit Cards vs. Cash and the Future Battles in Personal Payments

It might come as a surprise, but debit cards made their debut way back in the 1970s. Over the years, debit cards made up ground on cash as a convenient, interest-free way to pay, eventually becoming the dominant payment method in the US, UK, and beyond.

While cash still has its place, debit cards helped to usher in this new age of faster, more convenient, and more digital payment methods. There’s a lot that can be learned from the history of debit cards versus cash, especially for businesses trying to look to the future to see what the next trend may be.

Two decades to accept, four decades to conquer

In the 1970s, people were being paid directly into their bank accounts, and so, they wanted to pay directly from them, too. Credit cards were imprinted to allow for ATM withdrawals from a single network, but there wasn’t a quick and convenient card that would pay and give instant confirmation that the payer had the funds.

Building on existing credit card authorization infrastructure, banks made use of a combination of microchips and magstripes, but it wouldn’t be until Mastercard’s unsuccessful Mondex that the stored-value chip-and-PIN concept would be introduced.

The 1990-made concept is now commonplace, and the inclusion of chips in debit cards would become mandatory in Europe by 2005 and by 2015 in the US. Despite the convenience and the chance for customers to pay by card without taking credit, banks were slow to push their debit offerings, particularly in the US.

This was greatly down to the interest on credit payments floating the expensive credit infrastructure, as well as the fragmented state of ATM networks. Eventually, later in the 1990s, banks saw the benefit of offering debit cards on an integrated ATM network. Still, it took until 2018 for debit cards to overtake cash as the most popular payment type in the US and UK.

Does the battle indicate how long the next change will take?

Innovations can take a long time to take hold, with some figures finding key pieces of technology taking between 20 and 70 years to make it to widespread acceptance and deployment. Right now, the headline technology that looks to be the next step in personal payments looks to be crypto.

Adopting new areas of finance will invariably boil down to trust, convenience, and the backing of connected businesses. Crypto is faster than other payment methods, can be conveniently used via phones and even specialized cards and devices, and can be wholly trusted thanks to the blockchain that forms the network.

With crypto continuing to hit the headlines, all that’s left is business use. Crypto acceptance will continue to grow, but a business that makes it easier to use crypto as a payment method, primarily via a leading crypto payment gateway integration, will help to facilitate this next step in payments and, for now, get ahead of the competition.

This is because, as noted, convenience is key to adoption. Leading crypto payment gateways could help to fuel the growing trend of crypto payments as they’re user-friendly for both the business and the customer. Throw in the stable conversion rates and 24/7 functionality, and, naturally, there’s a lot of appeal to embracing crypto for all.

Debit cards were introduced in the 1970s, picked up steam in the 1990s, and then overtook cash in the late 2010s. Now, the crown once secured by debit cards looks to be under threat most immediately from the collective of eWallet options – from PayPal to mobile apps – and, down the line, crypto payments.