Credit cards go vertical, ditching classic look and magnetic strip

From the old way of carbon copying an account number and having a customer sign off on a purchase through to the advent of magnetic stripes and the chip-and-pin systems of today, the act of using a credit card hasn't changed much over the last 50-odd years, even as the technology under the hood has.

But that seems to be changing as card providers and issuers are moving away from the style of card that IBM engineer Forrest Parry is credited with inventing in the 1960s and toward something a little more modern.

The most obvious shift afoot today turns the familiar wallet-shaped horizontal credit card on its side and adopts a new vertical configuration that's faster and easier to use.

Cowyk Fox, an executive with South African bank Absa, explained the rationale for why it's happening.

"Think about how you use your card when you make purchases," he said. "When you hand over your card to a cashier, tap it to make contactless payments or dip it into a point-of-sale machine, you're likely holding it on the short end, vertically," Fox said.

The vast majority of credit card transactions today happen either online, where no physical card is involved, or using chip-and-pin technology, or tap-to-pay contactless systems. But those transactions are still happening on infrastructure built for the previous generation of swipers, so the industry is upgrading itself to keep up with consumer tastes while beefing up security behind the scenes.

"A portrait orientation [is] easier to tap," MasterCard Canada's vice-president of digital products Suhkmani Dev told CBC News in an interview. "From a user's standpoint, it's good design for many reasons."

Although consumers typically think of themselves as owing money to the brand on their card, the debt is held by whoever actually provides the card, with MasterCard, Visa or Amex merely processing the transaction.

That's why Dev says MasterCard doesn't consider itself to be a credit company or a card company but is actually in the "payment technology" business.

"Everything we do from a standards perspective or a design perspective is to enable choice and payments seamlessly and securely," she said. 

Instagram-style portrait-mode orientation for cards may add a dash of design pizzazz, but the real reason for the shift is what's happening on the back end, where tap-based vertical cards go a step beyond what's possible on older systems.

Unlike swipe cards, tap-enabled cards are backed by a technology that Dev calls "tokenization" because the identifying information being exchanged in a transaction is unique for just that one transaction, making it much harder for a fraudster to intercept any data that would allow them to compromise an account and use it again and again.

"If you lose your card, instead of your Netflix being cancelled, we replace that sensitive 16-digit card information with a unique identifier, which the merchant can still use to do a transaction on, but it's not your actual 16 digit number," she said. "It's dynamic."

Partly because of a pandemic-fuelled desire to avoid touching things wherever possible, Visa's contactless credit card transactions increased by more than a billion globally in the first quarter of 2021 compared to the same period a year before, according to Visa.