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No doubt you’ve read the numerous articles over the past several months about the pending demise of credit cards. Not the concept of paying with credit, but the little slivers of plastic in your wallet. I think this proclamation is a little hasty.
Yes, I do think that smartphones will be an alternative to whipping out your credit card. AT&T, T-Mobile and Verizon Wireless have formed Isis, which is a mobile payments network that will let subscribers pay with smartphones. It’s launching sometime this year. And Google has teamed up with Citigroup and MasterCard to embed technology in Android phones so they can be used as mobile payment devices.
This is all about a technology called NFC, Near-Field Communication. This technology can turn your smartphone into your wallet. When you’re ready to pay for some merchandise, you wave the phone near an electronic reader. So you use your phone rather than your credit card to make the payment transaction.
The idea of using a smartphone as a credit card is enticing, and I believe this payment option will come to fruition. But I predict we’ll still be carrying around our plastic credit cards.
Here are four very practical reasons why:
So even if most stores become equipped with new electronic readers, we’ll still have a bunch of consumers whipping out their plastic and paying the old-fashioned way. To avoid discriminating against those without smartphones (or those who’ve simply forgotten to bring them along), stores will need to maintain the ability to swipe plastic.
Image by AndresRueda: CreditCards, via Flickr
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