Accenture Payment Services managing director Matthew Friend predicts that cards will go the way of the eight-track.
The managing director of Accenture Payment Services, Matthew Friend, has published an article in Forbes that has predicted that the adoption of mobile payments could eventually make the use of ATM and credit cards nearly obsolete.
If it were up to many retailers, credit card companies, and other financial institutions, smartphones would be the new plastic.
There are many major players that are currently vying for dominance in the mobile payments market, ranging from retailers to telecom operators, and from banks to credit card companies. At the same time, large scale attempts to tempt consumers to use the technology – that have come with a hefty price tag – have not been nearly as successful as the predictions had suggested. Equally, though, the growth in adoption is there and while the total number of uses remains small, it is rising quite rapidly.
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Mobile payments are expected to reach $720 billion by the close of 2017, according to Gartner.
This is a tremendous increase, when taking into account that the figure for 2013 had been $235 billion, according to the same research firm. Despite this growth, it is still rare to see this technology being used in real life, today. The average consumer continues to go about his or her day with a wallet full of plastic debit and credit cards (on top of their membership and points cards). Credit and debit cards currently represent over $4.7 trillion in the United States, over 75 billion individual transactions. This represents a massive American credit card issuer total profit of $21.5 billion.
Clearly, even by the end of 2017, mobile payments will represent only a sliver of the total for credit card and debit card transactions in the country. That said, Friend wrote that “change is coming, and failure to adapt will carry great risk. For banks, the question boils down to whether they will lead the change or allow rivals to take the payments business away from them. With payments bringing in up to a quarter of banks’ revenues, this is not an idle question.”