credit card

‘We only accept Credit Card’ is this the future of payments?

by Josh Biggs in Finance on 19th February 2019

The first credit card was issued almost 70 years ago. It’s been a long road. Everything had started with a friendly dinner in New Your restaurant in 1941. Frank X McNamara, American business was so embarrassed to discover that he forgot his wallet and wasn’t able to pay his half. He didn’t want to let it happen ever again.

This unfortunate incident helped Mr. McNamara to come up with the genius concept of creating a credit card that could allow people not to worry about cash any longer. In 1950, Mcnamara started a new company – The Diners Club. The company could offer credit cards to its customers. At that time only 14 restaurants in New York agreed to accept paper cards instead of cash. Creators couldn’t predict such a breakthrough.

At this point, there are about 416 million credit cards in the United States. Everyone can appreciate the convenience of the credit card system. Customers can easily keep track of their expenses, get a cashback and pay in the stores all over the world.

It’s quite difficult to recall the times when people used cash only. Millennials, for instance, have never experienced that. Since payment system evolves rapidly, it raises a question. Will credit cards replace cash in the nearest future?

 Security

Cashless payments reduce the risk of robbery. Even if your credit card is lost, you can report it to your bank, so the provider can cancel your card and send you a new one. Moreover, if your credit card information is stolen and you notice it only after the first transaction has been made, it is not an issue. You need to notify your credit card company, and after bank investigates your case, you can get a refund.

Stealing customer’s money is pretty difficult at the moment. You just need to follow simple steps in order to protect yourself from fraud. For example, you should keep your password secret and double check your monthly statement.

Convenience

This payment system gave so many opportunities to its customers. Nowadays everyone can pay online for their cloth, tickets, and groceries. It is also easy to manage personal transaction from anywhere in the world. It can be done with a smartphone or laptop. Since it is incredibly comfortable more and more people are giving up on cash. So, small business owners also started providing an option for paying with the card because they simply want to keep their customers.

According to experts at MyPaymentSavvy, providing an online payment option improves cash flow a lot. Customers can make their payments instantly. No wonder, there are so many online shops right now.

Following the latest tendencies, major cities such as New York, Boston, and Chicago also launched a cash-free cab concept.

Expense tracking

At this point, you can keep track of your expenses using your mobile phone only. Banks all over the world offer its customers mobile apps that are connected to credit cards. So, every time customers make the transaction, they get a notification. You don’t need to keep all the receipts in your wallet or go to the bank to get a report. Customers can categorize their spending and control their budget.

Worldwide acceptance

Going abroad and looking for currency exchange on the spot is quite problematic. First of all, you can be deceived. Secondly, you might exchange less or more then you need. Credit card system made it easier. So, you can pay for your hotel stay, rental car, and meals in the restaurants without extra fees.

Nowadays your credit card can be accepted in more than 200 countries all over the world. It is not the same with the debit card though.

Cashback and other bonuses

You can get a percentage every time you buy something. Your credit card can offer you from 1% to 3% cashback. More than that, you can also expect bonuses. As a newcomer with good credit, you can get signup bonuses (around $50-$500). You can even receive points for gift cards. Every time you purchase something, you get a certain amount of points. Usually, you can get five points per dollar spent. Once you have enough points, you can look through online rewards catalogue and get something you like for free.

Intense competition

The world is moving fast these days. No wonder, customers started adopting alternative methods of payment. Entirely possible, credit cards will follow cash and become obsolete.

Buyers are thrilled about digital wallets such as Alipay and ApplePay. There are also pre-paid methods (when someone is loading fund into the digital card) and post-paid cards ( when buyers pay for their transactions afterward). Let’s not forget about cryptocurrencies that started gaining its popularity in 2016.

All alternative methods of payment offer its customers some unique features. So, the credit card system should become even better to endure the market’s intense competition.

What can credit cards system offer in the future?

According to the New York Times, cashless transactions are on the rise. At this point, Scandinavian countries can show it in practice. In 2015 large banks in Norway refused to accept cash at all. Bank representatives believe that other banks will follow this direction as well.

It can be a good chance for the credit card system. Mastercard and Visa have recently released biometric credit card. It means the transaction can be complete only after card owners verify it with their fingerprints.

Also, credit cards can get even smarter over time. For example, the system can develop an artificial intelligence application that can provide a highly individual approach to every client.

Some people have already started living without cash. Entirely possible everyone will hear soon enough ‘We only accept Credit Card’.

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