A lot of different payment options besides cash have sprung up in recent years. While credit and debit cards have been around for quite a while, they are far from the new kids on the block now. The most recent developments in payment options are digital wallets and contactless payment.
The term “digital wallet†is actually a rather broad and all-encompassing term that enfolds a number of disparate payment options. The term digital wallet can include ID verification and multiple payment options that can cover purchasing with multiple different credit cards, according to Credit Cards. However, it’s important to note that digital payment options are still in their infancy. Credit cards, on the other hand, are a staple of the world economy and of people making purchases. For digital wallets and other contactless payments to take over from credit cards, some serious changes in economic infrastructure and consumer opinions will need to take place.
Digital Wallets
There are a number of different options available when looking for a digital wallet, otherwise known as an e-wallet, or other contactless payment method. For the most part, digital wallets are all smartphone apps available through various companies for both Android phones and iPhones. In fact, Hong Kiat provides a list of ten potential digital wallets anyone can download and use. Some of the companies that offer these services include Google, Apple, PayPal, and Square.
These apps don’t just hold on to your payment information, they can also store data from loyalty programs and member cards so you can continue accruing your earning rewards and the like even without the physical card. To use these digital wallets, all you ever have to do is swipe your phone across a reader. Of course, this means the business you’re shopping at needs to have a device capable of reading the unique wallet signals. If the store has the proper reader, then customers have an even easier and more convenient check out experience.
On the business side of things, there are expectations of digital wallets becoming the next big thing and taking over the world of payments. In an interview about digital wallets with CNet, Mario Shiliashki, the senior vice president of emerging payments for MasterCard said of the rise of e-wallets; “It’s absolutely an opportunity for us; we see it as what will help our business grow for the next 10, 20, 30 years, even faster than we’ve grown in past decades.â€
The Odd Case of Contactless Payment Cards
“But I thought digital payment options were supposed to avoid the need for cards?†Some of you might ask, well, that’s why contactless payment cards are an odd mixture of both digital wallets and regular credit and debit cards. They can be considered in the group of digital wallets since you just need to swipe them pass a sensor to pay, but they’re a plastic card that still sits in your actual wallet and holds all your credit and debit card info. However, contactless payment cards don’t necessarily have to be cards; according to Transport for London, contactless payments might be made with key fobs and stickers as well.
In an article discussing the new San Francisco startup, Coin, Slate discusses the new idea of another type of payment card. This card, which Coin states will “simplify, improve, and fit seamlessly into your life,†is another plastic card with a changeable magnetic strip that can mimic the attributes of up to eight different credit cards. The card syncs up to an app on your smartphone via Bluetooth where you can designate which card it is to mimic at that particular moment. But like a regular credit or debit card, you swipe this one
Credit Cards
There’s not too much to say about credit cards. They’ve been around for a number of decades, a ton of people have them, or multiples of them, and just about every business has a card reader. Of course these generalizations aren’t entirely true, but the fact is that credit cards are all over. And with mobile card readers and POS systems like those by Shopify becoming more and more popular, credit cards don’t really look like they’re going away any time soon. Although, during the CNet interview, when discussing global payment usage, Shiliashki stated, “This gives us a lot of runway to truly revolutionize the world and digitize payments, both in the 15 percent that is already using credit card networks, but also in the 85 percent that is still using cash.†Time will tell what Shiliashki and Mastercard will do.
Who Will Win?
As you can see, digital wallets, contactless payments and credit cards aren’t really disparate payment methods. All three are intertwined with credit cards as the primary foundation. The other methods are really just different ways to store your credit card info to make it easier to pay. Perhaps something major and different will be developed in the future at some point. However, until then, credit cards could technically be called the winner since the other payment methods stand on the back of the little plastic cards.
