Innovation plays an important role in both social and economic developments. Many products and services were innovated exploiting the latest technology to enhance human life standards. One of the most important innovations is the plastic payment card. Paying with plastic cards is considered a revolution in the payment industry. This radical innovation was first limited to specific locations to where it belongs at the very beginning, but with the incremental improvement in the related systems and technologies used in developing those cards, they eventually changed from single purpose to multi-purposes in which they can be used for even hundreds of services as long as the limit allows all over the world. Use of plastic cards is very convenient and secure and this is the main selling point of the cards. Individuals as well as businesses prefer the use of credit cards for this purpose. However, there are a number of risks associated with these cards. Fraud and security risks have increased especially with the introduction of Internet, the benefits of plastic cards for payments still overweigh the risks associated to their usage and are still seen as one of the best innovations in the payment industry. This paper will highlight some general innovation theories and focus on the contribution of payment cads, as an innovation, to our live and economy as well as addressing some of this innovation’s controversies and risks.
Definition of innovation:
The general definition of innovation refers to any product or service containing a set of feature, which is introduced to the market as a complete new aspect with new advantages and qualities. Business Innovation narrows the context to that of creating a profitable service or product, one that customers will buy. Michael Porter perceived innovation as a new way of carrying out inventions that is commercialized. (Fagerberg.J et al, 2006)
Innovation vs. Invention
An important distinction is always made between innovation and invention, which can be differed as to that invention is the first occurrence of an idea for new product, process or service, while innovation includes the first attempt to carry this invention out and introducing it to the market. Invention can be new product or service or even new ways of improving an existing product, formation of a better process for task execution, bundling services or improving internal operation to provide cost advantage whereas, innovation is often domain-specific where a particular invention is commercialized opening up new consumer groups intending to generate profit. (Westland, 2008)
Types of Innovation
Innovation can be categorized according to the individual markets they are targeted at as follows:
Product innovation: Refers to the novelty of new product introduced to the market aiming to attract a group of users to make a purchase.
Service innovation: refers to the new way of delivering a service or even to the creation of a...