How Debit Cards Began

How Debit Cards Began

May 7, 2015         Written By Bill Hardekopf

Debit cards are now considered part of the “norm” of day-to-day life. After all, when is the last time you pulled out a checkbook to pay for your groceries? As common as these cards are, they were practically unheard of a generation ago. Nevertheless, researchers were predicting their prevalence some 40+ years ago.

As an article in Gizmodo outlined, an October 1971 conference of technology experts and researchers was held with a simple goal in mind: create a comprehensive, invisible surveillance program. What they developed sounds almost identical to the modern debit card system.

Researchers were asked to design a surveillance solution on behalf of the Soviet Secret Police to monitor all visitors and citizens in the boundaries of the USSR without being obvious or intrusive. Rather than creating a set of hidden cameras, flying drones or phone tapping devices, the researchers came up with what they called an electronic funds transfer system (EFTS), something that looks strikingly similar to the debit card system we all use today.

A few years later, you will find discussions of this EFTS in popular science magazines. In the September 1975 issue of Computers and People magazine, researchers described the system as follows: “Say you are about to buy a book. You present your card (sometimes called a “debit card”, although National Americard calls theirs an “asset card”) to a clerk who puts it into a terminal which reads it and then calls up your bank. If you have enough money in your account, or if your bank is willing to grant you that much credit, the transaction is okayed; your account is debited; and a credit is dispatched form you bank to the book store’s bank account.”

Doesn’t that sound familiar?

Debit cards don’t just provide a simple means of accessing bank funds. They provide an insight on how we spend our money. Researchers predicted this more than 40 years ago, and it has become an everyday tool in today’s world of financial transactions.

The information contained within this article was accurate as of May 7, 2015. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and may be compensated if you take action with any of our affiliate partners.


About Bill Hardekopf

Bill Hardekopf is the CEO of and covers the credit card industry from all perspectives. Bill has been involved with personal finance for over 15 years. He is a frequent contributor to Forbes, The Street and The Christian Science Monitor.
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