When Will Plastic Credit Cards Go Away?

When Will Plastic Credit Cards Go Away?

June 22, 2020         Written By Tracy Farnsworth

Experts believe the question is no longer if credit cards will disappear. It is how long before credit cards go away. As more people are switching to mobile payments made through their smartphones or smartwatches, how long before the plastic credit card is extinct?

In 2014, Apple came out with Apple Pay. Using an iPhone, iPad, or Apple Watch, people could pay for services and send payments to family members. That is one of several services that make mobile payments possible and eliminate the need for plastic credit cards. Since then, several competing mobile payment and digital wallet services have taken the nation by storm. Carrying plastic could be a thing of the past if this trend continues.

How Do Mobile Payments Work?

Mobile payments are digital banking transactions that are used to make a payment in a store or other business. They can also be used to send money to another person. You can use mobile payments to pay for your purchase at a store without needing cash or a credit/debit card. You can transfer funds to a friend or family member or to pay someone for an item you purchased at a garage sale or flea market.

Near-Field Communication (NFC)

How a mobile payment works depends on the technology. Many retailers use Near-Field Communication (NFC) payments. Radiofrequency is used to transfer the encrypted transaction code from the phone to the contactless reader in the store or business. Phones or watches need to be held within a few inches of the reader, but you never have to hand your phone, tablet, or smartwatch to the cashier. You may need to use your fingerprint, a PIN, or facial recognition to verify you are an authorized user making the purchase.

Once the phone or watch has processed the transaction, the money is immediately sent to the retailer and the sale is complete. You get a receipt. NFC payments are always encrypted, so they are safer than using a plastic card. NFC is the most common contactless payment method and most smartphones and smartwatches contain the technology needed for this payment method to work.

Magnetic Secure Transmission (MST)

In addition to NFC, there is Magnetic Secure Transmission technology. MST works in the same way only magnetic signals are generated and mimic the magnetic strip you would find on a credit card. The card reader picks up the magnetic signal and processes the encrypted data using secure tokenization technology that uses the highest security measures to keep transactions safe.

With either of these technologies, a plastic credit card is never needed. Information is stored in your secure app and used for the payments or money transfers. The card information is encrypted, which doubles the safety measures used to avoid theft. Both NFC and MST technologies assign a limited-time, one-use code to send the payment or fund transfer. That encrypted code is randomly generated and can never be used again, which increases security. Plus, there is still the fingerprint, PIN, or facial scan issue. Without one of these to verify e purchase, it is unlikely a thief would get far.

A Breakdown of the Different Contactless Payment Options

Apple Pay – Use Apple Pay on an Apple device to make secure, contactless purchases in stores. You can also use it on websites and in apps. If you’re sending money to friends or family, you can do that right in a message. You never need a credit card with Apple Pay. If you happen to have an Apple Card, you get a daily cashback award on Apple Pay purchases.

Fitbit Pay – Fitbit Pay works with several of the Fitbit fitness tracking watches. You set up your Fitbit Pay account by adding a credit or debit card to your wallet. When you go to pay, hold your wrist near the reader and the payment is processed instantly.

Garmin Pay – Garmin Pay works the same way as Fitbit Pay. You need a compatible Garmin fitness tracker. Add a credit or debit card and hold your wrist up to the reader when you go to pay.

Google Pay – Google Pay works with any reader with a Contactless Symbol or GPay. Store your credit card in the Google Pay wallet. When it’s time to pay, hold your phone or watch up to the reader. Encrypted code is sent to the retailer to pay what’s owed. Your credit card number is never part of that code.

LG Pay – Set up an LG Pay wallet on your LG phone or tablet. Add a credit card to the wallet to pay using your phone at a contactless reader in stores.

PayPal – PayPal has a long history as an e-wallet. Use it to send money to friends and family members. Pay for purchases in stores.

Samsung Pay – Like the other digital wallets, Samsung Pay requires you to add a credit card or debit card to your wallet. Use your Samsung device to pay at the contactless reader.

Which Credit Card Companies Offer Contactless Payments?

With so many credit card companies, it’s estimated that well over 630 million credit cards are in circulation. That only counts the cards from American Express, Discover, Mastercard, and Visa. As cards expire and are replaced by a new card, that’s also millions of credit cards going into landfills. Recycling a credit card isn’t common practice in cities and towns, so cardholders chop up their cards and toss them into the trash where they do not break down for decades.

With digital wallets, you add a credit card or debit card number to your secure virtual wallet. The payment system submits the payment when you request it by sending an encrypted code. Many of today’s most popular credit card companies work with at least one of these methods. With the credit card number in hand, you would never need a plastic credit card. A digital wallet eliminates the need to carry plastic.

Switching credit cards to mobile pay and contactless transactions helps the environment. It’s also safer than carrying a card that could get left behind on a counter or stolen from a purse or wallet. Safety measures like facial recognition, fingerprints, or PINs add an extra layer of security when you make a contactless payment. Here are some of the options the different credit cards work with.

American Express

American Express works with Apple Pay, Fitbit Pay, Google Pay, Samsung Pay. The American Express app is available for Android and iOS devices. Pair the app with your mobile wallet. The app links you to the latest discounts at retailers, and the mobile wallet app lets you pay without needing a plastic credit card.

Bank of America

Bank of America credit cards work with Apple Pay, Fitbit Pay, Garmin, Google Pay, and Samsung Pay. For sending payments to friends and family, the Bank of America app uses Zelle. You do need to set up an account with Zelle. For paying in stores, set up one of the digital wallets. When you go to pay in a store or business, see if the card reader has the Contactless Symbol. If it does, hold your phone or watch near the terminal, log in on your app, and wait for the sale to be completed. You can also use the Bank of America app to get cash from a participating ATM.

Capital One

Zelle is found in the Capital One app. Use it to send money to friends and family members. The card also has a long list of accepted digital wallets. Use Apple Pay, Fitbit Pay, Garmin Pay, Google Pay, PayPal, Samsung Pay, and Virtual Card Numbers With Eno. Eno is specific to Capital One. It’s a system that creates a virtual credit card number for each purchase you make with a merchant. One that purchase is complete, the number is locked until you unlock it again.

Chase

Chase offers a range of digital payment options. Apple Pay, Fitbit Pay, Garmin Pay, Google Pay, LG Pay, and Samsung Pay are the key choices. There’s also Chase’s own system called Chase Pay. Chase Pay eliminates the need to create a new account. Use the Chase app and submit your log-in details. Chase cards that qualify for Chase Pay are already loaded and ready to use for your purchases.

Citibank

Some credit cards work with several virtual wallets. Citi cards work with Google Pay. It simplifies your options and makes it easy to get set up.

Discover

Discover is one of the most popular credit card companies. If you have a Discover card, you can use Apple Pay, Garmin Pay, Google Pay, and Samsung Pay for contactless payments. Discover adds additional digital wallets when new methods are added and meet the company’s standards for approval.

How long will plastic be around? It’s hard to tell, but credit card companies are embracing contactless technology. When you apply for a new credit card, do your research. Find out if the credit card company offers contactless payments or has a credit card app that allows you to pay in a store or transfer money to another person without needing a credit card. Many do, which makes it easy to narrow your options before you apply for a card. Mobile payments are more convenient and can help eliminate the need to carry plastic credit cards.

The information contained within this article was accurate as of June 22, 2020. For up-to-date information on any of the terms, cards or offers mentioned above, visit the issuer's website. Many of the offers on this article are from our affiliate partners, and LowCards.com may be compensated if you take action with any of our affiliate partners.

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tracy

About Tracy Farnsworth

Tracy Farnsworth went straight from a business track in high school to a full-time job in mortgage banking in Burlington, Vermont. After having children, she built a freelance career in content writing and took online classes as time allowed. She completed Social Media Marketing and Digital Marketing certificate programs with Ireland's online Shaw Academy and completed several courses in SEO and analytics. In her free time, she's the “mom” to a very clingy rat terrier, and the pair walk at least a mile every day. She's also a novice baker who is trying to master the art of sourdough bread.