- Credit cards are quickly replacing cash, and credit card usage is at an all-time high.
- As payment technologies like mobile wallets, cash-sharing apps, and cryptocurrency continue to advance, credit cards are transforming to keep up.
- The ways we use credit cards today may look completely different in the future – here are four predictions by financial experts.
In the wake of mobile wallets, cash-sharing apps, and cryptocurrency, credit cards are transforming.
Consumers may seem to be tapping more than they’re swiping these days, but credit cards aren’t going away just yet. In fact, a TransUnion report from earlier this year foundcredit card usageto be at an all-time high.
According to the report, Americans have over 416 million credit cards, and almost 175 million Americans have access to at least one credit card. Those numbers reflect increases of about 77 million and about 25 million, respectively, since 2012.
Amnah Ajmal Sharma, the executive vice president of core products for North America at Mastercard, told Business Insider that she isn't surprised by the climb.
"People are excited by the experiences that a card payment can enable, such as a trip with loved ones, not the act of using the card itself," Ajmal Sharma said. "Making cards the payment of choice for how a person lives and works entails embedding payments seamlessly into their lifestyle and giving them ease, convenience, and peace of mind."
It's not just large expenses like hotels and flights that Americans are putting on plastic. A 2017 CreditCards.comsurveyconfirmed that more people are using credit cards for purchases under $5 - especially millennials.
"Credit cards are slowly replacing cash, so in theory everything you pay for in the future would be with some sort of credit or debit card, or mobile wallet," Eric Brown, CEO of Aliant Payment Systems - a payment processing company - told Business Insider. "As payment technology continues to advance, cash will eventually only be in museums for people to look at."
That's where Adam Jusko, the founder and CEO of Proud Money - an online magazine focusing on financial news - sees opportunity.
"There is plenty of demand for doing small transactions between people or with very small businesses, but the mechanisms are still a bit clunky and require bank account access," Jusko told Business Insider. "There obviously is a technology hurdle to overcome, but it is easy to see how a convergence of existing technologies could make this happen eventually."
There are seemingly endless possibilities for what credit cards could be used for in the future. Business Insiderspoke with six financial experts to get some ideas:
1. Transportation
Jason Steele - a credit-card expert who organizes an annual credit-card conference - said that he doesn't know how people will be traveling in the future, even mentioning flying cars, but he's convinced he knows how they'll pay. And he's not alone. Of the six financial experts we spoke with about what credit cards will be used for, four mentioned transportation.
"A ticketless transit becomes a reality across the world," Ajmal Sharma said, describing "tap-to-go" public transit systems. "Instead of standing at a machine or waiting in line at the ticket booth, consumers will soon be able to whip their contactless cards from their wallets and tap and pay directly at transit turnstiles."
According to Ajmal Sharma, Mastercard worked with Transport for London to establish a system where people can use contactless cards to pay for tube, subway, bus, and some rail travel without having to load a transit card first.
Brown said he sees credit cards being used for space travel. "Within 20 years, we will use credit cards as a way of securing future trips that can be years out," he said. "Space will be the next destination."
Mark Hamrick, a senior economic analyst for Bankrate.com, said he thinks credit cards will pay for car rides - they just won't be driven by humans. "There are innovations which have yet to take hold, but we generally expect," Hamrick said. "These include payments for rides given by driverless cars."
2. Person-to-person transactions
Cashless transactions like selling tickets, reimbursing someone for drinks, and even paying rent are on the rise according to theNew York Times. And Steele said that he thinks credit cards will evolve to keep it that way.
"In the future, I believe credit cards will become two-way devices, allowing cardholders to not only make purchases but also to accept payments from people that owe them money," he told Business Insider. "Payments would simply be credits to their card account … This would allow people to move money back and forth easily."
3. Privacy keepers
Recently, bothVisaandMastercardhave released biometric credit cards, which utilize a cardholder's fingerprint to verify and complete transactions. Eric Richards, the co-founder of Moneymunk -a website that compares credit cards- said he thinks this could be just the beginning.
"Credit cards will begin to store additional sensitive information," Richards said. "It's possible cards may hold other sensitive data in addition to our finances."
Ajmal Sharma said she agrees. "The card would look the same as any other bank card, but has a small biometric scanner," she said. "The card in this case becomes a way for verifying 'who I am' and, if universally accepted, can become a reusable way for people to identify themselves every time, across organizations." She said she thinks the biometric card could serve as a birth certificate or a way to consolidate a person's multiple passwords.
"One could imagine, for example, that the holder of a futuristic biometric credit card might be able to get a discount on a gym membership when paying with a card that stored medical history and showed their doctor had prescribed more physical exercise," Richards said.
4. Artificial intelligence and 'smart cards'
Though not all of the experts were on the same page about how, the general consensus was that credit cards would get smarter over time.
"We can say that cards will evolve with the application of artificial intelligence to create a more tailored approach to redeeming for rewards and coupons," Julie Sherrier, managing editor for CreditCards.com, told Business Insider.
Sherrier said that AI will likely be used to detect and fight fraud, manage a person's spending habits as well as payments, detect patterns, and tailor the types of of products or services a person might need.
Cards like Plastc were created to hold multiple credit card accounts on one single card, butfell shortof expectations. However, Richards said he still thinks that concept is the future. "You'd literally carry around one card that could charge or withdraw all your accounts," he said. "The card has a secure pin of its own and a … display that can show the numbers of the different cards it holds."