Card payments have been around for decades and card companies like MasterCard or Visa have become one of the most influential financial institutions. What will change in the upcoming years? And are mobile payments going to take over?
The plastic cards
Since debit cards are still widely used as a safe means for transactions without risks of going to debt and credit cards provide the user significant benefits with loyalty programs, they are both beneficial to the customer in certain ways. But with the rise of upcoming pay tech options, where loyalty programs are being handled in banking apps and a physical card is replaceable with one’s mobile phone or watch, is there going to be a significant change of how customers pay in the first place?
Let‘s have a look at the data. According to Worldpay’s 2018 GlobalPayment Report, the global use of mobile payments like Apple pay, Samsung pay and Google wallet is forecasted to increase to 28percent in 2022 surpassing credit cards and cash. This would indicate, that mobile payments are in fact taking over.
The old, the new and the merge
But card companies are always aware of what is the next big thing in the industry and they are more than willing to incorporate it and adjust their influence. For example the Mastercard and Fit Pay Inc.Collaboration. At the same time, the tech pioneers like Apple, N26, or Revolut have begun linking their successful payment methods and apps to their own cards.
To answer the question: Why would the companies who revolutionized the industry would be taking a step back to plastic cards? The answer is simple – to reach out to new customers. Age does affect how people choose their payment methods. And while the youngest generations maybe moving from card-based transactions to paying with their iPhone or Fitbit, there is still a significant part of older customers on the market who just started to embrace the benefits of cashless payments with cards. Not even mentioning the trend of some businesses going cashless altogether, therefore some customers will be even forced to give up on their beloved cash.
What does it all mean?
The competition on the cashless market is unprecedented and everybody’s trying their best to boost the options and benefits for the customer. While 10 years ago the card companies took their customers for granted – nowadays, they have to fight for them to stay. But as the customers who have been paying consistently with cards are moving to more convenient options, there are new customers who likely have their card for some time already but still prefer cash. So while the cash payments are going to be on the decline – the good old plastic card with a contactless option is going to be the next step for this segment of mostly seniors and generally people above 45 years.