Why Your Old Credit Card Machine Is Still Useful

In the past decade, the speed of technological transformation in finance (known as FinTech or financial technology) has significantly accelerated. Most business owners over the age of 40 will remember a time when the main way to take credit card payments was using an old credit card machine that embossed card details onto paper sheets. Since the mid 2000s (as the internet became a tool everyone had access to) the technology has radically shifted to digital credit card machines where business owners would swipe cards and get paid much faster. As hackers found ways to exploit the swipe card technology, banks and technology vendors improved card designs to utilize chips that were much harder to hack. Through the Covid pandemic contactless payments became much more commonplace and swipe card transactions fell to all time lows. This begged the question as things return to normal can businesses still use the old credit card machines to make sales?

The history of credit card machines

Credit cards have existed longer than you’d expect the first conception of a credit card was in a utopian novel by Edward Bellamy called Looking Backward which was published in 1887. The first iteration of a credit card was Western Union’s “Metal Money” which looks a lot like a military style dog tag, a metal card embossed with a name. In the 1920s oil companies and hotel chains launched credit cards (used more like a bar tab card) for preferred customers. It took until the late 1930s for credit cards to be used more ubiquitously; it was designed entirely for business use, merchant’s would issue credit cards for their biggest customers using the Hartford Charga-plate. The way these cards were charged was using an old credit card machine that would emboss the charge card on to a paper which detailed the purchasers information and was processed later by banks. In the 1950’s Frank McNamara founded Diners Club which offered a payment card for its customers that could be used across a number of New York restaurants. In 1951 New York’s Franklin National Bank would issue customers who were screened and approved for credit with a charge card they could use to make retail purchases. In 1958 American Express introduced a paper charge card and that same year they sent out 60,000 of these cards to their customers in the mail.In 1959 the first American Express plastic card was launched which was the birth of the modern credit card as we know it now.

How do old credit card machines work? 

An old style credit machine

Credit cards are put into an imprinting machine where the card details would be imprinted onto paper laid over the card. The merchant would place the card into the machine, lay two thin sheets of paper over the card and slide a rubbing mechanism over the card. The two thin sheets over the card would imprint the credit card owner’s name and card details. One of the slips would stay with the merchant to be redeemed when handed to the bank and the other would serve as an invoice for the customer. The entire process did not use the internet, phones or any electronics, so was entirely manual and relied on the merchant returning the slip to the bank to get paid for the sale.

Are manual credit card machines still legal?

The old style credit machines are still legal in the United States, and some vendors continue to use these machines as well. Visa is phasing out usage, however other credit card companies still allow the use of these machines, so they can still be used in some cases. The main reason these old credit card machines can still be useful is if you don’t have access to the internet or electricity, either you sell in a remote area or you’re hit with frequent blackouts. Unfortunately it looks like many of the other credit card companies will phase them out soon. However if you do have one it pays to hold onto in case of blackouts or other disruptions to the internet or power.

If you’d like to buy one there are some vendors still sell these, the average price is from $20-30. POS Supply still sell these machines if you’d like to have one as a back up.

Are these old credit card machines PCI compliant?

If your business complies with all the PCI Data Security Standard (DSS) requirements. If you make an imprint of the card you need to secure the imprint by restricting physical access to this cardholder data and restrict access to data by business need to know.

What are the concerns with old credit card machines?

Other than the fact they are being phased out and in the next 5 years likely won’t be able to be used anymore these machines are not as secure as their modern counterparts. The main security flaw is fraudsters can create a phony credit card and then use a machine to emboss fake or stolen credit card numbers onto a fake credit card. In comparison to the modern chip cards which transmit encrypted data directly to the merchant and verifies the card was actually present.

Final words

There are a number of reasons to at least hold onto your old credit card machine, especially if your business gets sub standard internet or is subject to frequent power outages or if you sell outside frequently. Other than this there aren’t many good reasons to continue using these machines as opposed to the modern card machines (that are often free or cheap.)

Whilst you can still use these machines to process card credit cards, there are a few issues. Firstly it’s a very slow way to get paid, you have to take these paper receipts to your bank to get processed versus a more modern machine will process your payment in 1-2 days. The second issue is that these old credit card machines are being phased out, only by Visa at the moment but it’s likely coming from all vendors and within 5 years they’ll be completely obsolete. The third issue is that fraudsters can easily spoof real credit cards or make fake ones and leave you without payment for the sale made to them. The final issue is they’re much more cumbersome that the newer machines, so they take longer to complete the transaction.