By Jason Steele


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It seems like we have been talking about mobile payments, and the adaption of, for a few years now. For some reason, while the technology exists, most consumers prefer pulling out their physical credit card to pay rather than using their phones. To try to gain some insight on this, Jason Steele asks the following question to our experts in the 35th edition of our Credit Card Expert Roundup:

"When, if ever, do you think that mobile payments will eclipse the use of plastic payment cards, and why?"

Shawn Coomer - Founder and Managing Editor of Miles to Memories

In the United States mobile payment systems have not caught on as quickly as some may have hoped or speculated. The use of plastic is deeply ingrained in our culture and it will likely take Americans longer to accept these technologies compared to elsewhere in the world. Things are changing though.

For example in China almost all transactions have moved on to mobile. Pretty much every store accepts payments made by mobile QR code and very few places accept credit cards anymore. That is a future I think the United States will embrace in some form, however it will take 5-10 years before we see mainstream acceptance.

Mobile payments will come to the United States simply because phone manufacturers and banks all want that to happen. These payment systems are less expensive overall and easier to roll out in many cases. The big battle will be between the different factions who want to decide how and which mobile solutions to roll out. I suspect like with Chip & PIN, the U.S. might end up with a mobile payments norm that differs from what is used elsewhere in an effort to appease banks and payment processors.

There is no doubt that mobile payments offer more convenience and the potential for reduced transaction and operational costs, but the U.S. doesn’t move as quickly as other countries in this space and we’ll still have to wait a short while until we see wide adoption of current and future mobile payment technologies.

Lee Huffman - Travel hack and points expert at Bald Thoughts

Although the adoption of mobile payments is growing slowly in the US, it is more commonplace in other parts of the world. In some countries, more than 50% of credit card users have made a mobile payment. Statista forecasts that there will be more than a billion people using mobile payments by 2020. ( Apple and Samsung are encouraging mobile payments by making them ultra easy to do using their smartphones.

The encryption of payment data when using mobile payments is attractive to banks because of the technology's inherent ability to reduce fraud. Some credit cards, like the US Bank Altitude Card, provide bonuses when cardholders make mobile payments. These incentives will accelerate the adoption of mobile payments by consumers.

Credit cards are widely used by consumers, so it will be many years before mobile payments eclipse physical credit card payments. But the ease of use and bank incentives will convert mobile payments from a novelty to a common practice over the next decade in the US.

Levi King - Co-Founder and CEO of Nav

If I had to put a date on when mobile payments will comprise the majority of transactions, it would be 2035. By that time, we’ll have an entirely new population and demographic mix with the majority of consumers having the entirety, or at least the majority, of their life with a mobile device and mobile payment options. In addition to the population change, we should also experience a shift in the payment processing landscape as older business owners retire and new business owners enter and implement new technology options.

Ben Luthi - Credit Card Expert and Personal Finance Writer

I think it will take a while for mobile payments to outpace plastic payment cards. While the data I've seen shows that Millennials are more likely to use mobile wallets than older generations, those older generations are still going to be around for a while.

Even as mobile payments become more ubiquitous, though, I still see a good chunk of people continuing to use plastic. As an older Millennial myself, I still haven't gotten on that bandwagon, and I'm not sure I ever will, just because I'm used to the process I already use.

Jason Steele - Credit card expert and founder of CardCon

I think that it will take many more years until there are more mobile payments than payments with plastic or metal cards. If you look back, people were never very sceptical about offering their credit card numbers over the phone, but Internet commerce faced some significant, but short lived hurdles in the 90s.

The issue with mobile payments is that there are multiple, competing standards. One will eventually emerge, and it will certainly seem obvious in retrospect. However it’s still unclear which one it will be. I still think that physical credit cards will be with us for at least another 10 years, and perhaps longer. After all, there are still plenty of people using fax machines, and those aren’t nearly as attractive as the latest credit card designs.

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