Written by: Jeremy Baber, CEO of Lanistar
First, it was the traditional bricks and mortar high street bank to fall out of favour with customers, then physical cash itself – now, time could be up for physical bank cards as well. The way we bank and engage with finance is becoming increasingly mobile-centric – especially on a day-to-day basis.
Our money is becoming increasingly digitised and this trend will extend further away from bank cards and traditional cash usage. Recent findings indicate global usage of mobile payments and wallets continue to rise at a consistent rate. In light of this, are the expiry dates on our bank cards now looming closer than expected?
Digital natives driving change
The digital native generations (a person who has grown up in the presence of digital technology) of Gen Z and Millennials are at the forefront of driving this change. It’s a rare circumstance to be stood behind a digital native at an ATM queue these days as they continue to source the quickest, most convenient solutions when it comes to financial solutions.
The introduction of innovations such as Google Pay and Apple Pay means more people are paying via mobile. Gen Z and Millennials very rarely leave the house without their mobiles as it is no longer just a communication device. It is a wallet, virtual payment method, bank account and so much more. Fintech continues to drive innovation around these habits, as it’s more secure, streamlined and greener compared to traditional cash and card payment methods.
Fintech goes green
ESG targets now sit firmly at the centre of most industries’ aims and objectives and fintech is no exception. Research from Thales shows that the amount of plastic produced annually in physical card production amounts to the equivalent weight of 95 commercial aeroplanes. Thus, confirming that despite a common misconception, finance does possess a level of responsibility to drive environmental change for the better.
As a society, we have been making the conscious effort to eliminate as much plastic from our routines as possible. Industries such as retail and hospitality have made strides eradicating single-use plastics such as bags and straws from operations. Now, fintech is driving the change to curb its reliance on plastic cards. Instead of the mass-production of plastic cards, mobile payments offer a greener alternative for customers. Users now have the capability of ending the cycle of using and discarding expired cards (which are non-biodegradable) on a global scale.
Traditional finance disrupted by fintech
The success of fintech can be pointed towards customer appetite for a tech-driven service which was not offered by traditional finance. It is no coincidence that challenger banks, digital assets and mobile payments (to name a few) have accelerated in popularity over the past decade or so. Fintech continues to innovate and challenge the status quo of traditional finance through harnessing the latest technologies on behalf of the user. A prime example include technologies such as PIX, which has come to dominate the world of Brazilian payment solutions. With PIX technology trialling cardless cash withdrawals, it is likely to accelerate our shift away from traditional bank cards and payments once mainstream adoption kicks in.
Will the future be cardless?
Fintech is leading the way when it comes to ending our reliance of traditional payment methods through innovating the latest technologies. Customers will soon be able to access their financial information from one place as the sector continues to push the limits on what it is capable offering its users. Being able to make mobile payments, transfer between digital wallets and access digital assets from your mobile has all been made possible thanks to fintech.
Catering towards a market which is increasingly populated with digital natives has sped up the process of moving away from traditional card use. Offering a greener, more personalised and secure service whilst interacting with finance is an attractive alternative when compared to the comparatively staler services offered by traditional finance.
The Covid-19 pandemic triggered the final act for cash usage for many of us and it is likely digital transformation and fintech innovation will deliver the same fate for the bank card.