In a bold statement, a Paypal executive predicts consumers will mainly stop using physical credit cards by 2018, just four years from now.
Hill Ferguson, a global vice president for Paypal, bases this prediction on the growing use of smartphones.
In Australia, 65 percent of adults own smartphones. Technology has gotten to the point where consumers can often pay just by flashing their smartphones.
As more businesses and consumers start using smartphones for payments, credit cards will become unnecessary.
Visa doesn’t agree with this prediction. Vipin Kalra, the Visa country manager for Australia, said credit cards are too ingrained in modern life to just disappear in a few years. Millions of merchants around the world gladly accept credit cards and it’s going to take time for them to switch over to wireless payments from smartphones.
However, Kalra acknowledges that the popularity of mobile payments is growing fast. In response to this changing market, Visa is working on its own digital wallet to give its customers a broader range of products to choose from.
Visa is in fact ahead of Paypal in this market, as Visa has partnerships with more than 40 financial institutions in Australia to develop a digital payment system.
Paypal is still working on building these relationships and doesn’t yet offer this service.
While the two companies disagree on when digital payments will replace credit cards, both seem to acknowledge that this switch is happening. Physical credit cards may very well soon be a thing of the past.
Now is the time to open a credit card with excellent terms before they disappear completely!
Source: au.ibtimes.com. Photo source: digitaltrends.com.
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