Discuss “How Things Work: credit cards”

Many Americans enjoy the convenience of using credit cards, but the workings of the credit card system are often a mystery.

A typical credit card transaction is completed in just a couple seconds, but the process involves several devices, a communications network, and a specific set of standards.

The credit card was first created in the 1920s as a way to identify customers and keep track of items sold on credit. The original credit card was much less complicated than the modern credit card. It did not involve any automation or processing network, so each store maintained its own credit system.

In the 1970s, innovations including the magnetic stripe were added to create the credit card that is widely recognized today. The development of universal...