Apple Pay, Google Wallet, Samsung Pay and PayPal are just a few of the solutions which financial technology commentators predict will bring about the downfall of cash and the plastic card. Others predict cashless and plastic-free societies by 2025. Do banks
and their consumers genuinely believe this is true?
A Smarter Card
This month, the Smart Payment Association
published statistics revealing that a staggering 1.5 billion smart payment cards were shipped globally in 2014. With the US migration to EMV® and contactless gaining momentum, this trend is on a steep upward trajectory.
Consider that, in 2014, the US accounted for 185 million shipments, up from 30 million in 2013. In fact,
one report projects a compound annual growth rate in the North American smart card market of 18.4% until 2019 so this number is set to grow significantly. On top of this, less than 10% of the cards shipped in the US were contactless. The industry will therefore
see organic growth just from greater bank adoption, consumer demand and standard card lifecycle replacement. Once contactless cards are in the hands of end users, the convenience and user experience benefits will be obvious, which will further fuel increasing
Taking this into account, claims of a near-term cashless and plastic card free future are unfounded, and this is without even considering new innovations. Bank cards with a mini-computer, an LCD screen and a digital keyboard can display a one-time-password
for two factor authentication, your balance as well as your transaction history. In addition, cards are in development which activate an otherwise latent dynamic magnetic stripe when a password is entered. No password, no payment allowed.
Plastic and Beyond
As we speak, companies are also working with manufacturers to integrate biometric fingerprint scanners into payment cards. Separately, quantum physicists are bringing forward quantum computing technologies to develop cards that are impossible to counterfeit.
Security and Convenience Breeds Trust
In this industry, history shows that increased consumer confidence and trust breeds adoption. Without question, mobile will get more popular and plastic is yet to win over some consumers to become their default payment method. But do bear in mind that plastic
is simpler, quicker and more secure than any other method.
Payment methods aren’t easily killed off, we add to them to increase security, options and convenience. When cheques are still in circulation, can we really discuss the demise of cash or plastic? Payment instruments are symbiotic; we use different methods
in different situations. There may come a day when plastic is put out to stud, but that day is far beyond the horizon.