[Dave Birch] It is the 40th anniversary (is that Ruby?) of the launch of the credit card in the UK. On 29th June 1966, the first one million Barclaycards were issued by Barclays Bank to selected customers. Barclaycard had the market to themselves for six years, as it wasn’t until 1972 that Access (remember “your flexible friend“) was launched by Lloyds, NatWest and Midland. Oddly, I still have my diary for 1972 and it makes no mention of the fact (although it does mention just how many times I played “All the Young Dudes” by “Mott the Hoople” on my cassette player (which I do remember extremely well: I loved it, but it ate batteries).

It was far from obvious, in those days, that credit cards were going to be so successful (there is £56 billion outstanding on consumer credit cards in the UK today). As late as 1970, the Nilson Report said in its third issue “The heyday of bank card profits may be over as officials begin to wonder if there will ever be such a thing as profits”. By coincidence, I was reading Taleb’s “Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets” over the weekend and this reminded of Yogi Berra‘s famous paraphrase of the wisdom of Solon (a Greek visitor to the court of the fabulously wealthy Croesus, King of Lydia and one of the fathers of money — he was responsible for the minting of the first pure metal coins): it ain’t over till it’s over.

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It was fun, I have to say, looking at some of the advertisements from that time. For not entirely obvious reasons, the Daily Telegraph illustrated the print version story of the first UK credit card launch with a picture of Reg Varney (who those of my generation will remember from “On the Buses”) apparently launching Britain’s first cash dispenser a year later, in 1967. I shall check the circumstances with Sir Richard Heygate (who chaired one of the sessions at this year’s Forum) because I think he was working for IBM at the time and sold the first ATM into the UK. On the web, the Telegraph went with Jennifer Saunders.

According to the APACS figures for the UK (the 2005 figures were released last month), plastic cards now account for 62% of retail payments in the UK, as shown in graphic. But debit cards (£89 billion) have overtaken cash (at £81 billion) and account for a third more spending than credit cards (£61 billion). Are credit cards heading into their long tail? Perhaps by the 50th anniversary the UK will have gone the way that Japan seems to be heading: the line of credit will be against a mobile phone, not a plastic card.

Uk-Retail-Payments-Pie

If there is anyone young at heart enough to be reading a blog but old enough to remember either the first Barclaycard or the first ATM, please comment! Perhaps we can make a short podcast, an aural history, like they do of people remembering rationing or old folk songs.

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