The Transaction Telephone: Credit card automation strategies at point of sale

During the 1970s we became thoroughly accustomed to the use of “plastic money”; the volume of UK based credit card transactions rose from 10m in 1971 to over 100m by 1979. Today there are over 13m credit cards in circulation, and this excludes other cards issued by department stores and multiples. But this proliferation of plastic creates its own problems. Control needs to be exercised over excessive spending by card‐holders; the unit costs of processing card‐based transactions needs to be contained; and of course the possibility of fraudulent use must be safeguarded against. The transaction telephone is one way in which these problems can be tackled. Already commonplace in the US, they are now being used by some major department store groups in the UK. The first part of this article reviews the range of technological issues which have so far determined the way credit card automation has developed. It also discusses how other technological factors may influence the different kinds of service delivery packages for retailers and ultimately card holders. The second part, to be published in our next issue, will discuss aspects of market strategy development for both the larger and smaller card issuing organisations.