On 25 March 2024, the payments world honoured Roland Moreno for creating one of the most revolutionary engineers of technology that is still profoundly being felt 50 years to this day.
The introduction of the smart card by Moreno in March 1974 seemingly became the foundational start for a myriad of payment innovations that have set a precedent for contactless, mobile and biometric payments we use today.
However, Moreno was not without his critics as he was developing the world’s-first smart card in France. Cash and cheques were still king and technology had not been as widely accepted as it may have needed to be for Moreno to gain support for the implementation of a smart ring attached to the payment microchip.
But just like all great inventors, Moreno trialled-and-errored and thus came to the light-bulb moment of attaching these smart rings onto a plastic card, as what we now call today the debit and credit card.
Through years of startup efforts and gaining gradual support, Moreno’s ‘la carte à puce’ gained huge traction in the late 70s/early 80s with the introduction of ATMs for these smart cards to become compatible with.
The early 80s also saw the birth of one of the world’s more important electronic payments companies. Ingenico, as of today in 2024, have deployed over 40 million payment devices across the world as the point-of-sale specialists have become arguably the largest company in its field.
Patrick Blanc, EVP and Global CTO at Ingenico, spoke to Payment Expert on the importance of Moreno’s invention and how his smart card legacy is not only still alive at Ingenico, but also across the global payments landscape.
Whilst Moreno ultimately created the smart card to find the next breakthrough in payment technology to offer more seamless transactions, Blanc noted that one of the main driving factors of his creation was security and compliance.
He explained the evolution of security and compliance of the smart card, revealing: “Technology has had a big role to play, the original card was just a simple memory.
“The fact that you had the card in your hands, along with a simple code that the machine could read, was the beginning of the story. But your phone became a smartphone, the cards became smart cards, and thus became even smarter.
“Now, you have microprocessors that are embedded on this chip, which will allow you to do complex operations. Therefore, you can increase security, you can implement a compliance framework around how the different payment ecosystem is going to evolve with the various actors having to comply.”
Crucial to the development of Moreno’s invention were early adopters, one of them being Ingenico. The company has since become one of the leading POS facilitators in the world, with Blanc revealing that they touch “about one billion” people per day through their terminal payment technology.
This is in large part due to not only the rapid advancement of payment technology that occurred in the 80s and 90s, but also the establishment of the Payment Card Industry Data Security Standard (PCI DSS).
Regulation within the financial industry has proven to be pivotal, for better or worse depending on who you ask today. But the introduction of the PCI DSS enabled debit and credit card networks such as Visa and Mastercard to follow guidelines that enabled greater control and protection once the consumer uses it at the POS.
But when it came to for Patrick Blanc to single out one innovation in the electronic payments industry that has moved the needle the most, he revealed that the ‘connectivity’ and synergy of the internet and technology enabled payments to become rapidly more seamless.
He said: “It’s a continuum of things, but it’s the ability now to connect the terminal to a broader network.
“Now, suddenly, you can connect. You can connect with modem at the beginning, private lines and now the internet. The idea to connect the payment devices gives you another step function in what you can do.
“You can verify balances, you can evaluate credit directly in real-time. So, I would say connectivity has a lot to do with how payment terminals are evolving.”
But as Patrick Blanc notes, the “payments industry is very dynamic”, and with this comes new challenges and hurdles to overcome.
In the current day climate of the industry, fraud and security measures continue to plague the minds of financial institutions, just like they did in 1974. However, born out of the rapid pace of emerging technology, the payments sector is currently embroiled with a new type of fraud, that being artificial intelligence (AI).
“we still have to support magnetic strip and other payment instruments that have been with us for a long time”
Patrick Blanc likened this rise as part of the 10 year rule in payments, with another industry-alting development that comes along every decade that forces companies to strategise, which brings both positives and negatives.
The last 10 years has also seen digital wallets and contactless payments become the predominant payment method post-COVID-19. Patrick Blanc raises another challenge which pertains back to connectivity; how can institutions harmonise the demand for both traditional and modern consumer needs at once?
He explained: ‘You see the emergence of a lot of different payment methods today, and we are being asked to support those new payment methods, like Apple Pay, or other digital wallets on the terminals. You can think about all the contactless methods that have taken off with COVID.
“But at the same time, we still have to support magnetic strip and other payment instruments that have been with us for a long time. This complexity is part of what ecosystem sustainability is important for us.
“It would be a waste of our resources, meaning the earth’s resources and talking with a green mindset. Building terminals that will last are very reliable and that are also sustainable.
“We do a lot of work today on green terminals and energy consumptions and things like this. We have to marry the desire to move fast and evolve fast, as well as with our mission at Ingenico, which is to be a great partner to the rest of the sustainable industry.”
The concerted effort now for large-scale payment companies to focus its attention on environmental, social and governance efforts is indicative of the growth of the payments industry 50 years after Moreno’s smart card birth.
Whilst environmental growth may not have been at the forefront of his mind in 1974, the adoption and significance of his invention has enabled companies to divert into a plethora of avenues to maintain and uplift his legacy.
“It’s this desire to innovate,” remarked Patrick Blanc, who gave his thoughts on how Moreno’s legacy lives on not just at Ingenico, but for the rest of the financial world.
“Mr. Moreno was a prolific inventor. We start with certain convictions, of course around security and sustainability, and we marry them with what we see in the ecosystem, what we learn from our customers and listening to them for what they want.
“And then we come up with new things. Some of them will work. Some of them we know, as you will see them in your stores in a few years. Some of them may not, but we’ll continue to learn.”
One thing that the industry collectively learnt was the magnitude of the smart card and how it has been integral for every electronic payment and device that processes payments from 1974 to present day.
With the likes of Apple and even social media platforms such as X (Twitter) embedding financial capabilities, no feet would be possible without Moreno’s invention.
No longer can Moreno claim the smart card to be “big brother’s little helper”, it became the grandfather of modern day payments as we know it today.
