What does the future hold?
The horizon is filled with exciting new payment technologies and services that will greatly aid credit card use and growth. The expansion of mobile payment technologies, person-to-person payments, mobile credit card readers, online purchasing, and other developments will drive credit and debit card use in the near future.
Credit unions and their service organizations need to stay on top of these rapidly evolving payment advances. Offering these new technologies can be achieved faster and with less cost by affiliating with a payment technology company that creates these new products for a living.
For instance, CO-OP Financial Services in partnership with The Members Group just launched new two card products that add higher levels of convenience and versatility for card users: Reloadable prepaid cards and MasterPass, a digital service introduced by MasterCard.
The service allows consumers to use any payment card or enabled device to make a purchase and enhance the shopping experience online, in-store, or on any device.
Also beginning to make an impact on credit card use are the mobile credit card readers such as Square and Intuit GoPayment.
Forrester Research predicts that over the next five years, U.S. consumers will make mobile payments at an accelerating rate: $90 billion by the end of 2017, up from $12.8 billion last year.
In 2012, 36% of online consumers with mobile phones said they would be open to making this kind of a payment in a store.
Forrester Research expects that number to increase as consumers become more comfortable with the payment options offered by these and other mobile credit card reader services, including Google and EBay’s PayPal. These services connect with devices, such as smartphones, that are already in people’s pockets.
On the horizon is the EMV card, which promises to change the very nature of credit card use by replacing the traditional magnetic strip with embedded computer chips for authentication.
The major card networks—Visa, MasterCard, and Discover—have all issued guidelines in preparation of card issuers and merchants adopting EMV.
The transition to EMV will be achieved via a series of deadlines over the next few years. The deadlines differ from one card network to another. But stay tuned, because these technology-based, chip-equipped cards, along with the growing popularity of the mobile credit card readers and other payment advances, will be game changers in the credit card industry.
Plan now and be prepared for the new world of financial services technology. If credit unions focus on the right priorities and have in place the systems and procedures to adopt them as the market demands, the industry can grow both credit and debit card use and income well into the future.