These days, the humble plastic credit card is very much old news. However, its impact on society is anything but.
As of the turn of the year, there were 60.1 million credits cards in the UK and counting, some being chased by wescot credit services. Accounting for over 300m transaction and £15-£18bn of spending a month over the last year, credit card spending continues to rise as we steadily head towards a cashless society.
There’s no question that the credit card still has a huge part to play in the global payment industry, but with the advance of other payment technologies such as cryptocurrency and cash sharing apps, what does the future hold for the card itself?
The growth of the mobile wallet
The mobile wallet isn’t particularly new itself anymore, and the technology is set to grow further as people become more familiar and comfortable with using it. Card holders can use mobile apps to pay without the physical presentation of the card, as well as utilising the app’s features to monitor and limit spending.
Mobile wallets will also help the fight against credit card fraud, as users can simply ‘turn off’ their cards when they’re not using them.
The age of biological identification for payments is upon us, with new EMV cards with fingerprint biometrics having recently been released via digital security leader, Gemalto. Biometric credit cards, which utilise the cardholders’ fingerprint to verify transactions, add a third security layer to the previous two-fold of ‘something you have’ (the card itself) and ‘something you know’ (a PIN) with ‘something you are’.
The biometric card holds significant potential. In terms of contactless payment, the complexities of biometric fraud mean payment limits could rise significantly, or even become uncapped. In the future, a biometric card could also carry additional purposes, such as acting as a birth certificate or offering a medical history, which could in turn factor into particular payments or discounts.
Snappier, smarter transactions
Credit cards were once primarily reserved for major, lump sum purchases. Today, their increasing use in small, low-value purchases by the younger generations paints a picture for the bulk of future credit card use.
‘Tap-to-go’ transport is one significant future avenue. London residents will already be familiar with being able to use a credit card instead of their Oyster card when scanning into the Tube. This concept is envisioned to be used on a wider scale, leading to ticketless transport in the future, powered by tap-to-go card use.
Cards could also develop to become two-way payment devices, allowing users to make peer-to-peer payments for simple reimbursements such as drinks, food bills or paying rent — similar to the likes of Venmo and Monzo.
Advances in AI will also help credit cards become smarter. Although it’s not quite clear exactly how just yet, AI powered cards will be able to advise on spending patterns and habits, create tailored product lists and help to detect and prevent any fraudulent activity.
A fundamental part of a cashless society
No matter the specifics of what the future holds for credit cards, they will be a fundamental base for the cashless society to come. The removal of printed money and coins from the global economy is somewhat inevitable, although how far away that is varies greatly for different parts of the world.
Sweden, for example, will lead the world by becoming the first cashless country by 2023. Meanwhile, the upscale of that concept to a country the size of the US is currently unthinkable, especially considering the country is only in the early stages of contactless adoption. With Nordic countries leading the charge, the staggered arrival of the rest of the world is expected in due course.
Regardless of where and when, the credit card will play a huge factor in the adoption of a true cashless society. As with any major transition, people hold onto what they trust most. In the case of a move away from physical cash, the credit card remains as the next most familiar and trustworthy device available and will be a key catalyst in ingratiating more sophisticated technology.
The future remains bright for the credit card, with it set to remain a key element of financial management for some time. In what form though, we will have to wait and see.