The technology is constantly evolving faster and faster and for a long time there have been rumors of a mobile payment solution that makes it possible to pay for goods and services using the mobile phone. Last year, we wrote AI Finance about a service that DDB and Telepor will launch, Valyou, which is a mobile payment solution that customers of DDB and Telepor can use. The service utilizes NFC (Near-Field Communication) technology which is also used in public travel cards, passports and the like. Until the iPhone 6 was launched, only newer Android phones included NFC technology, but last September Apple announced that they were also working on a mobile payment solution called Apple Pay and thus included NFC in their latest models. The question many people are asking now is whether credit cards will disappear. Does mobile payment mean the end for credit cards, or will there still be a market for it?
Although technology is evolving and more people will be able to access mobile payments, it will still be a while before credit cards are taken off the market. Initially, it is quite possible that we will have a cashless society, and several experts believe we will take a big step towards just a cashless society in 2015. However, the forecasts indicate that it will take about 3 to 5 years before mobile payments are publicly owned and can thus start getting rid of cash.
Credit cards will probably be in the market longer than cash, and it will take a while before mobile payments are optimized so that it will be possible to stop using credit cards. However, it is possible that what we see now with regard to mobile payment solution is the beginning of the end for the credit cards. Admittedly, there are a few obstacles on the way there;
Have you experienced running out of power on your phone? Most of us have, and with today’s mobile phones it happens pretty fast! Cold, camera and various apps mean that the mobile phone is not always as reliable, and it is essential that it should function as the only payment method.
Today’s phones have big beautiful screens that allow you to play games and watch videos on your phone. The negative side of this is that the screens tend to shatter. This often means that one cannot use the phone for a period of time, and then it is important to have a credit card that can be used in the meantime.
In order to be able to use mobile payment, one must have a smart phone. This is what many older people do not have, and of course there must be an offer for these too.
These are some of the reasons why we at AI Finance do not think the time of the credit card is over, but it is possible to ask the question: whether it is the beginning of the end. There are several things that need to be in place and mobile payment needs to be optimized before pushing the credit card completely out of the market. Initially, it is probably the cash that will disappear, before the credit card may have to lose for technological development a little later.