Digital adoption is occurring faster than any other innovation in human history: in just two decades, digital technologies have reached about 50 percent of the population in developing countries and transformed societies through them. The use of technologies that increase connectivity and access to financial, commercial, and government services can lead to significant reductions in population inequality.  Will Digital Wallets and Payments Replace Credit Cards?

What Is A Bankcard?

A bankcard is a plastic card linked to a personal or checking account at a bank. It is used for non-cash payments at offline and online outlets, to top up your account, or to withdraw cash. 

The person or organization in whose name the card is issued is called the holder. The cardholder is the bank that issued the card. 

Bankcards can be credit cards or debit cards. Credit cards use borrowed money, which is issued within a certain limit and repaid according to the terms of the loan agreement. You can find more information here: teuscherfifthavenue.com A debit card uses only the holder’s personal funds. 

A bankcard must have a magnetic stripe and/or an electronic chip. It must bear the logo of the payment system in which it is issued (for example, Visa or MasterCard), the card number in the payment system, the expiration date, the holder’s signature and CVC code (CVV). A card can be issued without a physical carrier – such cards are called virtual cards. 

The Best Digital Payment Methods

1. Biometric payments

Biometrics are your unique biological and physiological characteristics: your face, voice, fingerprint or iris pattern. They are used to identify you when you pay or provide services remotely. For example, with biometric data you can pay by card without touching the plastic to the terminal, completely contactless.

For the system to start recognizing you, you have to agree to the processing of biometric data and submit it. Each time you use it, your image will be compared to the control data you surrendered the first time. Similarly, the iPhone remembers your facial expression and fingerprint when you first activate it, and then looks for similarities to the first version each time.

Cheating biometrics is more difficult than accessing control questions or text message codes to confirm payment. The easiest and cheapest way is to substitute a real person with their photo or design a 3D model of their face, but that is expensive and time-consuming.

2, Wearable devices.

Smart accessories have been a relative necessity for some time, including smart watches. Major technology manufacturers such as Apple and Samsung offer great smartwatches that can be used for card less payments at a regular terminal. Contactless payments for smart accessories use the same NFC technology as a smartphone just hold the watch up to the payment device.

These watches are becoming increasingly popular for a number of reasons: they can track your steps, make it easy to answer calls, and of course, make it easy to pay. Thus, we can see that this type of technology will gradually surpass traditional credit and debit cards for the near future.

On top of that, we may see similar accessories designed specifically for payments, which will probably cost much less than a typical Apple or Samsung smartwatch.

3. Mobile wallets.

Mobile wallets or digital wallets are usually in the form of apps such as Google Wallet, Square Cash or PayPal. Which can be thought of as technology-based pocket wallets, meaning they are digital in terms of storing information using cloud computing technology, and they are also mobile because many of them work through smartphone apps. These apps connect your bank account to a digital wallet, where you can make direct contactless payments using your phone and using Near Field Communication (NFC) technology to connect to a terminal in a store to make a payment.

You may have already used this method of payment. It has become very popular! People cannot steal and use your smartphone wallet as easily as a credit or debit card, and you do not have to worry about forgetting your physical wallet if you have your smartphone wallet handy.

What Is Digital Banking?

Today, so-called “digital banks” are becoming especially popular. Digital banking is alien to having an office and employees, cash registers, ATMs, and terminals. The customer gets all this in a convenient application or online version of the bank. Find the information you need here.

The first forms of digital banking appeared back in the 1960s – then it was simply the use of ATMs and cards. Now let us move to the 2020s and see that Internet access is now permanent, broadband has improved significantly, smartphones are widespread, and online banking is becoming the new norm, as customers want all types of financial and non-financial services digitally, remotely and quickly.

Europe and the US are gradually adopting new technologies, and Asian countries are already launching alternative digital banks. Today, new generation banks are not a stable source of income and do not bring super-profits, because their activity is completely dependent on investments.

Bottom Line

Perhaps virtual cards will replace physical ones. However, it will be influenced not only by ecology, but also by the trend of fast payments, as well as by the pandemic popularity of contactless payments. However, it does not seem that such a revolution will happen faster than within a few years. Certainly, people from the older generation will be convinced to such solutions more slowly and with less confidence. It is also possible that physical payment cards will not be completely eliminated, but only their use will be reduced.  The vast majority of card transactions are already made by contactless payments, and mobile wallets based on Google Pay and Apple Pay are also becoming more and more popular.