DEFINITION of ‘Carbon-Paper Packets’
Multi-layered slips that merchants used to manually process credit cards before dial-up card readers became widespread. Carbon-paper packets were about the same size as today’s business checks, about one-third the size of an 8”x11” piece of paper laid vertically. They consisted of one layer of thin paper, usually white, followed by a layer of blueish black carbon paper, followed by two additional thin layers of paper, usually one pink and one yellow.
INVESTOPEDIA EXPLAINS ‘Carbon-Paper Packets’
To use a carbon-paper packet, the merchant would place the customer’s credit card in an imprint machine — a plastic and metal device also called a knuckle buster or zip-zap machine — then place the carbon-paper packet on top of the credit card. The merchant would then run the machine’s slider over the packet and the card to imprint the credit card’s raised number and cardholder name onto all three pages of the carbon-paper packet. The merchant would keep one page, give one page to the customer, and remit the remaining page to the bank.
At the end of the day, the merchant would manually transmit the information from the carbon-paper packets and transaction receipts to the bank, which would then process the data and pay the merchant. Carbon-paper packets are still available today for merchants who want the backup option of manually processing credit card payments when electronic systems are down. Today’s carbon-paper packets, however, are “carbonless.” They don’t contain the blue-black carbon slip because improved paper technology has created paper that can make an imprint on another page without the carbon slip.
Today’s credit-card processing systems, where Internet connections can transmit credit-card data from a magnetic strip or electronic chip and electronically approve a transaction in seconds, are vastly superior. These systems not only capture credit card and transaction data, they also verify that the customer has enough available credit for the purchase and can even notify the merchant to decline the transaction if the card is fraudulent or stolen.