Are Payment Cards To Face The Same Fate As Cash In The Virtual Age?

FinanceFeeds Editorial Team

As Millennials and Gen Z become the dominant consumer class, the way payments are made is changing.

mastercard

The term ‘Digital Native’ was coined by technologist Marc Prensky, and describes the generations of people who grew up alongside the Internet. For these people, technology is second nature, something they understand inherently and adopt far more openly than those raised in the age before the Internet- the so-called ‘Digital Immigrants’, as Prensky described.

Digital natives, the Millennial and Gen Z generations, are also rapidly becoming the dominant consumer class. Appealing to digital natives is a crucial step for survival in the modern age: companies have died and companies have thrived based on their willingness to adapt to the needs of the digital generations. This is no less true for the finance industry.

Once, cash was king, but as technology evolved we soon found this payment form obsolete, as plastic payment cards from our local banks gave us a far more convenient way to spend. But now, with the advent of technologies like Google Pay, Apple Pay, and the mobile banking app, the plastic payment card is looking to be facing competition.

Jeremy Baber, CEO of fintech company Lanistar, said this on the matter. “Young people have grown up with smartphones. They’re more likely to have a smartphone in their pocket than their wallet, and the finance sector is starting to take notice”.

“The way people are using the money is changing, Covid and environmental factors have highlighted the importance and flexibility of online or ‘tap and go’ shopping. This is particularly prevalent (but not restricted to) GenZ and Millennials, everything is smartphone driven this is why Lanistar have taken the bold step to reduce our reliance on physical plastic and focus on the Virtual Card”.

“Virtual cards are plastic-free”, Baber continued. “There was a study conducted by ABI Research, and they found that 3.5 Billion banking cards are being made every year. Now, granted, a banking card is only a piece of 3 x 2 inch plastic, but when you account for the number of cards being made, that’s a staggering amount of plastic”.

“Considering these cards aren’t even being used by some customers, we figured, why contribute to the problem? Which is why we’re so adamant on pushing the Lanistar virtual card”.

While Lanistar is rather bold in its approach to this topic, Baber’s stance reigns true: in today’s age, more young people are turning to pay for their daily shop with a virtual card loaded onto their smartphone than the physical plastic one tucked in their wallet. A 2022 study by CSA concluded that 53% and 62% of Millennials and GenZ respectively are using virtual solutions to make payments, and as these generations continue to set the standard in finance, it is likely we will see this shift continue.

So, is this the end for physical payment cards? Unlikely. There are still functions of a physical card that have yet to go virtual, like the ability to draw cash from an ATM, however where virtual payment technology will head next is difficult to predict.

 

Read this next

Retail FX

BDSwiss Unveils Dynamic Leverage and Zero-Spread Account for Enhanced Forex Trading

Experience a new era in forex trading with BDSwiss, a leading player in the industry, as it introduces two groundbreaking enhancements designed to elevate traders’ experiences on its platform.

Retail FX

Plus500 joins Futures Industry Association as US operations expand

Plus500 Ltd (LON:PLUS) has become a primary member of the Futures Industry Association (FIA) in the United States. The membership supports Plus500’s plans to expand its US business, positioning itself within the world’s leading trade organization for futures, options, and centrally cleared derivatives markets.

Market News

Weekly data: Fiber and Gold price action 

This preview of weekly data looks at EURUSD and XAUUSD where economic data coming up later this week are the main drivers in the markets for the near short term outlook. 

Market News

Unveiling the Top Performers in December 2023: A Stock Market Overview

As we approach the end of 2023, the dynamic landscape of the stock market unveils a year marked by high-profile events, from the resurgence of tech stocks to the demise of financial institutions.

Technology

Avelacom enhances connectivity across Middle East and East Asia

“Network latency is a critical factor in their operations across multiple, fast-moving markets where seizing arbitrage opportunities instantaneously is essential. We are dedicated to continually optimizing our global network paths. Our London to Tokyo route, a flagship for Avelacom, has been upgraded alongside other key markets in Asia, India, Turkey, and the Middle East.”

Institutional FX

DMALINK adds Commerzbank to its FX streaming service

“The inclusion of Commerzbank stems from ongoing client demand, achieving our core objective of providing data-driven institutional FX liquidity in a variety of trade sizes to users of any of our platforms looking to access primary markets efficiently.”

Institutional FX

Citi taps Traydstream to streamline trade documentation for its clients

Traydstream specializes in intelligent data extraction using AI and optical character recognition. Its technology significantly reduces the time needed for document checks in trade transactions, leveraging a machine-learning engine with an extensive rule database.

Retail FX

Greenwood launches mobile trading app for the Black and Latino communities

To encourage first-time investing, Greenwood will provide $10 to users, which can be used towards stocks and ETFs on the Greenwood Invest platform

Industry News

Did the SEC lie about DEBT Box’s alleged $50 million crypto scam?

The SEC has a two-week period to respond to the judge’s concerns about their factual and contextual accuracy in their allegations against Debt Box.

<