Thursday, September 01, 2005

No Cash? No Problem!

Back in the mid-1970s when I was just getting started on my journey into the “real world,” after graduating college, I was eager to open a bank account at one of the large Indianapolis banks that had bank machines. These were new-fangled gadgets at the time, and I wanted to make full use of them.

I moved to Indianapolis shortly after graduation, after landing a teaching job at a small school west of the city. And I opened an account at Merchant’s Bank which, like all the other banks of the time, no longer exists.

It was amazing. I could actually go to the bank in the middle of the night and deposit or withdraw money. What a great invention, the ATM.

Of course, you were even more limited then as to how much you could withdraw and in what denominations. Some banks, for example, sorted cash into envelopes of $25 or $50. That’s all you could withdraw at a time.

And most of the ATMs didn’t have a CRT monitor to give you instructions. They had rotating cylinders with words written on the edges. Each instruction would rotate into view as needed to let you know what to do next.

Also, if you had an account at Merchant’s then you could use only their ATMs. The same was true for any other bank. If you needed cash and there was an Indiana National Bank ATM right next to you, you couldn’t use it if you only had a Merchant’s Bank account.

ATM cards could only be used at ATM machines, not at gas stations or grocery stores. There were, of course, credit cards, but you certainly couldn’t buy a Big Mac with one. Basically, only gas stations, hotels, department stores, and full service restaurants accepted them.

Nobody thought of using them to purchase groceries or to buy fast food.

Today, of course, you can use not only your credit card, but your ATM or check card almost anywhere. It made the national news when the first McDonald’s restaurant started accepting credit cards. Now, there is a card scanner hanging on the outside of the drive-through window at White Castle.

Although a few small stores still require a minimum purchase to use a credit or debit card, most do not. In fact, I’ve gone online and purchased a single song from Wal-Mart’s music download site for 88 cents, charged to my debit card.

New technology is emerging that will allow you to simply tap your card on a pad at the checkout. A radio frequency transmitter chip is located in these cards, which sends all relevant information to the retailer. The magnetic stripe will soon be a thing of the past.

In a few years, I predict you will be able to use these computer-chip credit cards to buy a candy bar and soft drink from a vending machine.

You will also be able to carry out person-to-person transactions with credit or debit cards, because everyone will own a tiny, personal card scanner. So if you owe your friend 20 bucks, just tell him to whip out his card reader attached to his key chain, tap it with your credit card, and key in an amount. The funds will transfer from your bank to his instantly.

Just think, no more change to weigh down your pockets. No more waiting in line for little old ladies to fumble through their purses searching for exact change at the checkout. Just tap your card on the scanner and let the computer do the rest.

In fact, that technology might just signal the end of the ATM. Who needs to run out and get cash from an ATM when you can pay for everything by tapping your card?

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