The credit card is dead, long live the digital wallet
At the Mobile World Congress event this week, MasterCard and Visa have given the clearest indication yet that the death of the credit card is nearing, paving the way for a mobile payment era among customers.
Launched as the "Future of Digital Payments", MasterCard unveiled its plans to dominate the mobile payments market with a 'virtual wallet' called MasterPass.
Visa's V.me looks set to be MasterCard's chief challenger in the blossoming industry, with another digital wallet set for release.
The switch in strategies shows the widening picture of both companies moving towards a post-card era.
“Every device is becoming a shopping device,” said Ed McLaughlin, chief emerging payments officer, MasterCard, speaking at the event.
“MasterPass brings together all of the ways we pay for things, from traditional plastic cards to digital wallets, and gives consumers the ability to make a payment from wherever they are and with one simple experience.”
While MasterCard has offered online payment services for a number of years, the process is heavily involved around the physical credit card - with users seemingly unnerved about entering such precious data into the jaws of a computer.
A cashless society?
It would appear the attitude is changing however, with the need for three digit security codes expiry dates and length card numbers a thing of the past - simplifying user experience in the process.
Whether it be ASB customers making payments directly to Trade Me sellers through it's mobile banking app, or Kiwis embracing MasterCard's PayPass through ‘Tap & Go’ terminals in the lead-up to Christmas, the ball is rolling and the wheels are firmly in motion.
As reported by Techday in August of last year, Kiwis are heading for a cashless society. According to the results from MasterCard's Mobile Payments Readiness Index at the time, New Zealand ranked 17th out of 34 countries surveyed about mobile payment purchasing.
“New Zealand is moving fast in the area of mobile payments,” said Albert Naffah, MasterCard New Zealand country manager in August.
￼“With high smart phone usage and hundreds of thousands of chip-enabled cards already in market, this is an exciting time as we continue to progress towards a world beyond cash.
Across Europe PayPal has also gotten in on the act, launching a cheap-card payment product, while Google and Apple have also dabbled in a market growing from strength to strength.
While in Canada history was made last November, with CIBC and Rogers completing the first point-of-sale mobile credit transaction in the country.
"Visa says contactless payments have quadrupled over last year and now generate around 13 million transactions per month," according to Eden Zoller, Ovum's consumer analysts who commented on Visa's recent agreement with Samsung.
Each company will undoubtedly want to flood the market with it's own creation, but more importantly for customers, they will soon be inundated with mobile payment options which will banish the credit card forever.
The evolution and expansion of the market is evident for all to see, with countries across the globe finally ready to embrace a cashless society - and now the question of 'if' has been put to bed, the paying public eagerly anticipates the when.
Do you want a cashless society? Would losing the credit card be a good move? Tell us your thoughts below