Over the last few years, a number of alternative payment systems have emerged, and the list keeps growing. With the onset of geo-fencing technology and near field communication (NFC), it is now possible for people to pay at the register with their mobile devices. Although Google’s been backing it, Android still doesn’t have the iPhone’s clout — regardless, now that Apple Pay has hit the market, things do not look good for the future of the credit card.
The greatest challenge for companies that wanted to offer NFC was having the infrastructure in place. With Apple Pay now in the game, retailers will be much more motivated to appeal to the 19.8% of Americans with an iPhone, and their desire to get stuff by waving their magic box.
If that’s not enough, here are the top 5 reasons that Apple Pay will kill the credit card.
Cards have long been associated with fraud, and it’s a huge inconvenience when one gets stolen and used. With Apple Pay, your PIN and thumbprint provide a level of security that cards just can’t. Plus, your card information is held privately as Apple Pay serves as a proxy; not even the merchant can access your information.
One magnetic strip can only hold so much information. Digitally, however, you can use a variety of accounts and a variety of currencies. With the tech-savvy using Bitcoin, and local movements using local exchange trading systems (LETS), time dollars, and other complementary currencies, cards just can’t do enough.
One of the great benefits of paying by mobile is that you don’t have to fumble through your wallet. Perhaps we’ve gotten used to the elegance of digital design, but for most of us, wallets are just cumbersome. That’s one of the reasons we stopped carrying cash.
While credit card companies have been reaping millions off the 1.5-3% they extract from every sale (and finding new things to charge for every day), the CloudPay mobile payment platform already offers a 0.5% interchange fee. It won’t be long before we all realize that things get cheaper when you don’t have to pay for plastic.
It’s just time for an upgrade
With our music, we went from vinyl to 8-track to cassette to CD to mp3. Aren’t our economic possibilities deserving of such an upgrade? Just as we stopped carrying cash and started using more plastic, so we now reach the next point in our evolution.
Competition seals the deal
Now that Apple Pay is out, some retailers are already banning it because they want their own mobile payment app. Apple Pay has merely added blood to the water, and the frenzy has yet to begin.
That’s not to say that credit cards are going anywhere just yet — they still have some time to linger. After all, 42% of Americans don’t even have smartphones yet. But make no mistake … the end of the credit card is nigh.
[3/5/15] UPDATE: No matter how you choose to pay, readers, we want to stress how important it is to safeguard your financial information against fraud and identity theft. An unfortunate side effect of exciting new technologies is the appearance of people who find ways to exploit them, and Apple Pay is no exception. Thanks for reading the Blink;Blog, where we’re always striving to keep you informed!