The evolution of the payment card industry started in 1950 with a few hundred Diners Club cards and has since grown into a global powerhouse, processing trillions of dollars in transactions every year. This transformation didn't happen overnight. It was a result of four major innovations in payment methods - metallic coins, checks, paper money, and finally, payment cards representing electronic money.

Payment cards really took off in the US, thanks to a fragmented banking system and a heavy reliance on checks. The ingenious combination of payment and financing services in credit cards sparked rapid growth in merchant acceptance and consumer adoption. Payment cards became a staple across all income levels, offering convenience and flexibility. Merchants also benefited from faster transactions and the ability to meet consumer demand.

Now, let's delve into two crucial economic characteristics of the payment card industry. Firstly, it operates as a two-sided platform, requiring participation from both consumers and merchants. Secondly, it involves a unique dynamic called "co-opetition". This means that while there's cooperation on some fronts like technology standards, there's also fierce competition in most aspects of the business.

The industry is filled with major players, including associations like Visa, Mastercard, and American Express, as well as issuers, acquirers, processors, and EFT networks. The competition is intense, with "system wars" between associations, "issuer brawls" for consumers, and "backroom battles" between processors. The industry's structure and practices have also been shaped by antitrust litigation.

As we look to the future, new technologies like smart cards and biometrics could speed up the shift from plastic cards to electronic transactions. Changes within the industry, such as the rise of First Data and deals between banks and associations, could signal a turning point. The most significant shift is the move from physical payment methods to money that is digitally represented and electronically exchanged. This is the future of the payment card industry.