5 Products That Are Making Credit Cards Obsolete

You can rethink your next wallet purchase, as it seems like every month moves us one step closer to never needing one ever again. Cardless paying innovation is marching steadily on, rendering physical wallets and cards on the brink of obsolescence.

Smartphone payment has emerged as a popular form of alternative payment for anything from parking fees to restaurant bills to money transfers. In some cities, you can even withdraw cash without using your credit card. Systems like Cardless Cash Access will send a QR code to your phone that can be scanned at the ATM for cash access. Social media is also delving into connecting content to commerce through popular platforms like Instagram, Twitter and Facebook.

Given the increasing ownership of smartphones worldwide and the exponential growth of Wi-Fi connection speed, the barriers to payment on the go are being increasingly eliminated. The goal of making everything instantaneously accessible is on the brink of the horizon. The advancement of technology has seamlessly facilitated our journey into a new age of cardless transactions.

The supply of this cardless form of payment comes at a time when consumers are seeking ways to simplify daily tasks and to increase time efficiency. Carrying fewer items means less to worry about, and not having to find your card in the wallet means a few seconds saved. The expediency and convenience of this form of payment holds high allure for time-strapped millennials.

Some of the challenges cardless transactions face are achieving economy of scale if a particular system is required, safeguarding data security and ensuring the accuracy of identification if biometric systems are in place. Mostly, it has been a swift and seamless transition thus far. Here are a few noteworthy forms of payment replacing the use of your plastic credit card.

5 Smart Phone Payment

It doesn’t come as a surprise that smartphone payment has been gaining traction for a while now. The mobile payment app LevelUp accepts payments to registered users at participating stores.  All you have to do is register an account with your credit card details during the setup process. Thereafter, you only need to open the app and reveal your QR code to be scanned for payment. However, you can only pay with LevelUp if the store is a participant of the program. Since a large number of stores have yet to register, the growth is somewhat stifled.

In the past couple of months, we have seen instalments of the Pay by Phone programs around more than 30 cities, allowing for meter-less parking payment. The mobile app, once downloaded and registered, allow drivers to pay for parking by simply entering the meter number designated to specific locations. It will send you the parking confirmation via text and email and even remind you with a text message notification five minutes prior to the parking expiration. You can add to the meter straight from the phone without moving from your seat. There is an additional $0.35 fee for the service, though it’s entirely worthwhile for the sake of convenience.

The popular online restaurant reservation service, Open Table, which simplified the process of restaurant booking, has now introduced a pilot version of a payment option that will allow you to pay for your meals straight from your mobile app. After making the reservation through the application and once you are ready to pay, the bill will be detailed line by line on the Open Table mobile app. No waiting time for the bill - just tap and go.

4 Loop

Loop differs from the normal mobile payment in the sense that it doesn’t require any QR code scanning or opening any mobile application upon purchase. The Boston based start-up began as a Kickstarter project. It has come up with a system that allows your phone case to serve as the magnetic strip of a credit card so that the physical proximity of your phone is sufficient in rendering a payment. If you bring your phone case close enough to the credit card swiping machine, it will create a current that functions as swiping the magnetic strip of the credit card.

The advantage of this form of payment, unlike phone payment apps such as LevelUp, which only work with participating stores, is that Loop will work at any store. The setup simply entails storing your credit card detail through a mini attachment.

At this point, only plastic phone attachments fobs are available for purchase. By April, the phone case version should be available. Current limitations are credit card receivers that require insertion, and cards with secure microchip PIN systems.

3 Payment Via Social Media

We’ve been seeing a slow emergence of social media e-commerce. More often than not, the comments on Instagram are inundated with queries of products information. So where better to sell than to meet the clients on their chosen platform?

Fox and Fawn, a vintage store in Brooklyn, is leading the way, albeit in a rather low tech fashion. Type in the comment “ring me,” and the store will return your call to process your order. You will need to go through the initial process of setting up personal details, but once that is complete, your purchase is only a phone call away. Most brands are using Instagram accounts to inspire or set the tone for their brand image, but there are very few capitalizing on sales at this point. Bergdorf Goodman, however, has been capturing this niche. It will post images of merchandise for sale with the phone number of the store.

Towards the end of last year, Starbucks introduced its tweet a coffee campaign. Similarly, one has to go through an initial set up process, but once that was through it was possible to buy somebody a Starbucks coffee by sending them a tweet.

Similarly, KLM took a pioneering step in becoming the first airline to offer the air ticket purchase transaction through Facebook or Twitter. It will even allow passengers to add checked baggage and make seat reservations over these social media platforms. KLM boasts 130 social media agents answering all customer queries around the clock. It claims to have a response rate within 32 minutes. Since 2013, KLM has been using social media to send its airfare to its social media followers via the twitter handle @KLMfares. The current service is an extension of the existing online relationship.

2 Venmo

Venmo is probably best described as a social version of PayPal. The function of Venmo is essentially the same – it eases a person’s ability to make money transfers without going to a bank. The app allows you to connect your bank information and conduct transfers through messages or emails. It’s free to install, and most transactions are free of charge, with the exception of a 3% charge on credit card payments.

It also allows users to send reminders via email, and you never have to feel petty for constant reminder of minor debts from friends since it will do the reminder for you. It also makes splitting a bill or paying a friend much easier. Its increasing popularity is most likely attributed to its social element, something that is lacking in other payment apps.

It can indicate if your payment was for rent, a meal, or a movie night with friends. So far, there is an estimate of $10 million of transactions going through the system per month, and the growth rate seems to be on an upward trend. Currently, it is most popular with urban professionals in their mid or late twenties, but with the ease and popularity of the app, it won’t be long before it becomes a mainstream form of transaction. The company’s ultimate goal is to be accepted like Visa and enjoy widespread usage like Facebook.

1 PayTouch

Of course, the ultimate form of cardless payment is to be able to pay without having to carry any device at all. PayTouch is allowing exactly that by scanning your finger prints for confirmation of identity, and thereafter the access to payment.

The process begins with enrolling at one of PayTouch’s participating businesses and registering your finger prints and credit card details. This information is then linked to your credit card information. After that, at any participating store, your finger prints will be sufficient in making any payments. Quick, clean, and delightfully futuristic.

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