It’s been some time since I noticed a security van with armed guards outside a bank—a common sight not long ago, a reminder of the lengths people would go to get their hands on cash. However, the landscape changed rapidly, with the ongoing Covid-19 pandemic acting as a catalyst for the surge in digital and contactless payments.
Recent data from Barclays, a major player overseeing nearly half of the nation’s debit and credit card spending, reveals a significant shift in consumer behavior. An astounding 91.2 percent of all eligible card transactions in the past year were conducted using contactless payments, marking a new record.*
In the realm of in-store shopping, UK reports indicate a remarkable 58 percent of shoppers utilized contactless cards in 2022, reflecting a 94 percent year-over-year increase. This surge in digital transactions is not limited to cards; prominent digital wallets such as Alipay, PayPal, and Apple Pay command a significant global presence. Accounting for approximately $18 trillion in consumer spending, these digital wallets hold a dominant share of 49 percent in e-commerce and 32 percent at point-of-sale (POS).**
Addressing the growing concerns around security, it is crucial to dispel the notion that plastic cards are inherently more secure. Technological developments, particularly in fintech banking and digital wallets, have showcased robust security features, requiring multiple layers of authentication. Users must unlock their smartphones, open the correct mobile payment app, and enable two-factor authentication, ensure close proximity to the terminal. These factors contribute to a heightened sense of security, fostering the rapid and widespread adoption of digital wallets.
In addition to security considerations, companies are increasingly recognising their responsibility towards sustainability. Mastercard, a prominent player in the financial industry, has announced ambitious plans to eliminate first-use PVC plastics from payment cards on its network by 2028. This commitment aligns with broader sustainability goals, addressing the environmental impact of traditional card disposal methods, often leading to cards ending up in landfills.
Are plastic cards dead? Perhaps not yet, but their future seems less secure.
