bankingciooutlook

Is it Time to Say Good-Bye to Plastic Payments Cards?

Banking CIO Outlook | Thursday, June 23, 2022

Consumer demand has undoubtedly driven the growth in so-called "tokenized" payment solutions, allowing users to make card payments without using the card itself.

Fremont, CA: Plastic payment cards' days are certainly counted. Although they cover a small portion of all plastic items produced globally, several billion are issued each year.

However, due to environmental concerns, plastic cards – technically made of polyvinyl chloride or PVC – are now becoming unpalatable to consumers. They are also expensive to produce, costing around 7 dollars each. As a result, alternatives such as PLA (polylactic acid), metal, wood, recycled PVC, and even cards made of recycled plastic collected in coastal areas are beginning to appear on the market.

While it is encouraging to see many financial institutions sign on to the UN's Principles for Liable Banking, users must also acknowledge that many are using their eco-friendly cards to attract customers' attention. However, users would contend that fintech that likes to secure a strong future in a world where plastic payment cards have become extinct must go much further than this.

In some cases, users can make payments without using their phones by using a wearable device other than a fitness tracker, a ring, or a watch. For the consumer, it's an incredibly smooth and convenient process; however, it does mean that the financial service provider who issued the card has faded from view. As a result, cards — particularly ones metallic or with a personalized card face — are seen as a status symbol, even though they're difficult to flash around on a phone screen.

Why bother with physical cards at all?

Because of advancements in payments technology and infrastructure, many others no longer need to use physical cards, regardless of their material. Instead, users use smartphones or wearables to activate Apple Pay, Google Pay, or Samsung Pay in seconds, make the purchase, and users are back on their way.

Consumer demand has undoubtedly driven the growth in so-called "tokenized" payment solutions, allowing users to make card payments without using the card itself. In addition, many people do not want to carry their purses or wallet with them, so they prefer digital wallets. These wallets reside in their smartphones, along with all of the other essential services users require on a daily basis, such as maps, the internet, email, messaging services, and so on. 

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