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Today, Visa and MasterCard are the two most widespread plastic cards in the world but they were not the first bank cards to be issued. As a matter of fact, Diners Club was the first payment system that started promoting the use of plastic cards. This happened back in 1950 in the United States. A year before that time, Frank McNamara, head of Hamilton Credit Corporation found himself in a clumsy situation. He was unable to pay his restaurant bill because he had left his wallet at home. This experience set McNamara thinking about creating a payment instrument that would allow the person to go beyond the limits of the contents of his/ her wallet. This is how the idea of Diners Club pay cards appeared.
Diners Club had prototypes
We must note, however, that the first pay cards appeared in America much earlier. Banks would issue cards made of cardboard to their clients as a confirmation of their solvency for shops and other institutions where people paid money. In 1914, some stores started issuing cardboard cards to wealthy clients who could use them when making purchases in these stores. In this way, the storeowners tried to ‘tie’ rich customers to their stores. Later, this trick became known as a ‘loyalty program’.
In the 1920s, gas stations in the USA started using pay cards too. In 1928, a Boston company called Farrington Manufacturing produced the first pay cards made of metal. The holder’s personal information was embossed on the cards, which allowed automating their processing to a certain degree. The seller was able to make an impression of the card on the payment slip using a special press.
The card numbers and the names of their holders are still embossed on pay cards even though they are made of plastic today. It will be interesting to note that the font used for card embossment is called Farrington 7B. This is a sign of recognition for Farrington Manufacturing Company.
As far as credit cards are concerned, John Biggins is often referred to as their inventor. He worked as a customer credit specialist in Flatbush, a bank in Brooklyn. In 1946, he launched a credit scheme that he called ‘Charge-it’. Customers who had bank accounts with Flatbush were able to leave payment vouchers at local stores instead of money when making small purchases. The storeowner would later submit the vouchers to the bank and the bank would transfer the money from the buyer’s account to the storeowner’s account.
Diners Club: the first mass payment system
Diners Club became the first mass payment system that relied on cards. Its main distinctive feature was the presence of an intermediary between the cardholder and the bank. The intermediary undertook the responsibility for keeping the cardholder’s payments in good order. This allowed Diners Club to turn into a universal payment card.
Initially, Diners Club cards were made of cardboard and they were distributed among McNamara’s friends, relatives, business partners, and clients. McNamara made perfectly sure that every cardholder was solvent.
Anyway, by the end of 1950, the number of Diners Club clients exceeded 20,000 people and almost 300 restaurants accepted the cards. After a while, companies with big money understood the potential of pay cards (that had already become plastic) and they pushed Diners Club aside.
In 1981, the payment system was bought by CitiGroup. In 2004, a historical deal with MasterCard was made: since that time, MasterCard network accepts Diners Club cards.
Since 2008, Discover Financial Services, a global financial corporation, has been the owner of Diners Club. It bought the company for 165 million US dollars.
Diners Club International card types
DC specializes in issuing elite club cards to wealthy clients and it provides exclusive services and gives exceptional privileges to the cardholders. The services are aimed at travelers in the first place. There are multiple ways in which Diners Club cardholders can benefit. For instance, they are eligible for travel insurance at no extra fee. Airport VIP lounges are also available to them for free. They can also use discounts and various privileges when renting cars, booking hotels, and engaging in many other travel-related activities.
Where Diners Club cards are accepted
Diners Club cards are accepted in nearly 200 countries, in 35 million outlets and 1.3 million ATMs. Diners Club works through franchises and there are currently over 80 franchise holders around the globe. Each franchise holder is authorized to work in a certain territory. However, the holder of a Diners Club card is a client of the global network regardless of the place where he or she has acquired the card.
Advantages of Diners Club cards
The payment system adheres to the same principles that its founders formulated at the very beginning. The cards carry the letters T&E that stand for ‘travel and entertainment’. A Diners Club card holder automatically becomes a VIP.
The cards are meant for wealthy individuals whose income is above average. They are also meant for frequent travelers and lovers of comfort.
Here is a portrait of a typical Diners Club card holder:
- The person travels for business or pleasure more often than once a year;
- The person has a high stable income;
- The person is between 45 and 60 years of age;
- The person is a senior executive officer or a successful businessperson.
Services that Diners Club offers
First of all, a round-the-clock Diners Club Concierge service is available to card holders. The person at the other end of the line can do many different things for you from calling a taxi to booking a room in a Hilton hotel.
The second handy service is the Diners Club Lounges. Card holders have access to VIP zones in more than 450 airports around the globe. The airline and the ticket type do not matter.
Then comes the Diners Club Airport Assist. Among other things, it can help you do the following:
- Pass through passport control and other formalities in the airports in a faster way;
- Choose the seat on the plane;
- Have a car that will take you to/ from the airport, and so on.
One more advantage is the travel insurance. A Diners Club card holder is insured for up to US$ 100,000 when traveling. Besides, the insurance also covers your relatives if you are traveling with them.
The Diners Club Privileges service allows paying with the card in hotels, boutiques, restaurants, and so on at a discount. The discount can be as high as 30%.
The Diners Club Rewards program makes life even sweeter. If you have a Diners Club Premium card, you get bonus points for every purchase that you make with the card. Bonus points then turn into dollars, euros, pounds, or whatever currency is on your card.
