The credit card industry has been making strides in recent years. Issuers continue to take steps in launching more cards with better benefits. Cardholders are enjoying more choices when it comes to design. Retailers have been offering more branded cards. All these contribute to the increase of swiping and spending. TransUnion even reported that credit card usage is at an all-time high. To keep up with progress in other payment options, credit cards continue to transform. The way we use cards today may look different years from now. What bold changes can we expect to see in the future of credit cards?
Taking a Look at Current Trends
Recent advances in payment technology are slowly leading us to a cash-free future. Over 174.9 million consumers have access to a credit card. Experts believe that this increase in usage is good for the economy.
Another trend in the market is the rise of co-branded cards. The Uber card and a new iteration of the Amazon Visa are notable examples. Cardholders are likely to see more of this trend in the coming months.
Signatures are also starting to become a thing of the past. Retailers like Whole Foods and Wegman’s no longer require consumers to sign for credit card purchases below a certain threshold.
Leaders in Credit Card Innovation
When it comes to credit card innovation, the four major players in the industry are taking the lead.
Visa and Mastercard have both released biometric credit cards. These cards have built-in scanners that authorize payment through a fingerprint. PIN is no longer required.
American Express has been continuously exploring different applications of artificial intelligence. The company has even acquired the Mezi personal travel assistant app. It helps cardholders book trips based on preferences determined by AI.
Discover has launched alerts for cardholders whose Social Security number shows up on risky websites. The companies in-app messaging allows customers to connect with an agent via the app.
These payment giants all contribute to shaping the future of credit cards. Out of the four, American Express has the biggest potential to be the most powerful in the future, if the company can fully harness the power of AI.
Artificial Intelligence will Make Tailored Experiences Even Better
Companies are exploring the use of AI to predict and influence buying behavior. Last year, Maritz Motivation Solutions successfully used AI to predict the redemption of loyalty rewards associated with HSBC’s credit cards. According to the company’s Chief Data Officer Jesse Wolfersberger, the program demonstrates that AI, as well as machine learning, are the future of credit cards.
Additionally, the data gathered by AI can help consumers make the best decision on how to pay for an item based on their credit cards and available lines of credit.
Expect More Innovative Security Solutions
As payment technology continues to evolve, issuers are developing more protective features. After all, security is one of the top priorities when it comes to banking. A number of potential changes will help make the future of credit cards more secure.
Magnetic strips will be completely wiped out in the near future. Banks are starting to replace them with EMV chips. These can provide more security and prevent cases of stolen credit card information.
Another future credit card innovation is the dissolving plastic. Researchers are exploring the use of transient materials for credit cards. In cases of theft, the card will quickly melt away.
In addition, credit card companies are likely to explore more ways to use AI for detecting and fighting fraud.
The Future of Credit Cards Might Be Cardless
Ironic as it may seem, the future of credit cards might have no cards in sight. Right now, most credit cards are integrated with digital wallets.
In the coming years, developments in mobile payment technology may eliminate the use of physical cards. Only the information of the consumer registered in their database will be required.
Facial recognition can also replace the need for cards in the checkout lane. Alibaba has already been able to do this with the ‘smile to pay’ recognition system.
Some stores in the future might not even have registered. Instead, carts can be scanned, and consumers will be charged automatically.
Even if there might be no need for physical cards anymore, issuers will find ways to merge the credit card system to mobile and digital models. That means credit cards are not going away anytime soon.
There are endless possibilities in the future of credit cards. Exciting innovations will change the way we transact. One thing is certain: technology has a big role to play.