Recently, at the Wall Street investor training camp held last week, Paypal's CEO Dan Schulman pointed out that he believes credit cards will be basically obsolete within 20 years.
Shulman believes that credit card payment will be replaced by more convenient digital payment, such as contactless payment or QR code payment. Although customers still need a financing tool, they will pay more attention to front-end interests when choosing how to pay. Rather than back-end logistics.
While Schulman's comment appeared at the same time, bank card payments actually rose. Consumers prefer credit card payments more than ever. A TSYS study shows that debit cards and credit cards are still the most commonly used payment methods for users.
A study released by the Federal Reserve at the end of last year found that the use of bank cards in the US is on an upward trend. This is mainly due to the increase in the use of credit cards. Between 2015 and 2016, the use of credit cards has increased by US$190 billion, and 2017 may be It continues to grow.
Even Paypal saw the trend of users turning to credit card financing. It also recently introduced a more flexible choice of payment methods for customers.
Credit card payments are not really replaced by digital payments. In stores, customers prefer to pay by credit card instead of mobile wallet. TSYS data shows that even mobile customers with mobile payment wallets, only 65% plan to use mobile mobile payment to replace half or less of the credit card payment in the store.
Bank cards are still a decisive factor in the payment system, and this does not seem to change soon.
But Schulman’s claim should resonate because it is a trend we see throughout the payments industry, whether consumers choose to pay by credit card based on rewards or POS systems that provide credit.
As the industry grows, if companies want to maintain or improve their position in the industry, they must consider what they can offer their customers, whether it is convenience, financing flexibility, or rewards and incentive programs.