The future of payment cards
A short guide to digital transformation in the wallet.
This article, written together with Luca Troisi, Founding partner and Chief Digital Officer at Enhancers, is part of a series about the future of fintech and appeared originally on fintechdistrict.com.
Previous entries: The Bank Account Becomes a Marketing Space
1. Recycling plastic
In banking jargon payment cards are commonly referred to as plastic. The same raw material that industrial designers have been working with since the ’50s, shaping new and meaningful objects that fueled the spectacular growth of the home furnishing industry worldwide. UX designers today can play a similar pivotal role for debit, credit, prepaid cards in the age of open banking, envisioning future experiences and new, relevant products, both digital and physical.
We Enhancers are already pursuing this opportunity, beginning with a preliminary map of emerging behaviors and trends, and innovative card-based services. Here are the first results of our exploration.
2. Open payment
Card-related rituals — such as hiding when entering a PIN, writing down codes as fake phone numbers or constantly moving cards from the wallet to safe places at home and back — show how cards are often perceived as strictly personal, privacy-sensitive and potentially vulnerable objects.
Yet a paradigm shift is happening exactly in this discomfort zone, with cards progressively turning into digitally shareable money-management tools.
Products such as Extend or Spendesk, enabling advanced virtual cards management for companies, as well as services experimenting with temporary credit card sharing through mobile apps, are all connected to this trend. In an open banking environment, also the cards are morphing into “open platforms”. Radically new co-payment experiences are on their way.
3. Credit under construction
Cards were the fastest growing non-cash payment method last year (+17% YoY for debit cards, +11% for credit cards). This apparently unlikely increase in usage, as the mobile payment hype is peaking, can be partially explained by more and more inclusive policies, with a simplified and progressive access to credit cards for everyone.
Forget about credit score: the new generation services like CreditStacks (a card for professionals relocating to the US), are based on a credit building experience. The focus is less on the actual financial situation of users — their “history” — , than on their potential, as defined by their money-related behaviors, their payment patterns and so on.
Amazon itself has released its own Store Card Credit Builder; at the same time, more and more products laser-targeted to specific audiences are being launched: Deserve, for instance, grants college students a card designed to manage education expenses, as well as the post-graduation phases.
Getting a credit card is not a mid-term objective anymore, but a starting point. New interaction models become now available for card holders, like the one provided by Zero: a payment-meets-loyalty service where new users start at entry level with a few benefits such as basic cashback and minor rewards, and can then scale the program by reaching yearly spend goals, with increasing benefits and a fancier and fancier physical card (from quartz up to carbon).
4. Let’s get physical
Speaking of which, the actual features of the card as a physical object are being experimented with extensively.
The plastic gets augmented with built-in technology in order to maximize speed and safety. Battery-less fingerprint readers on the cards, for example, are likely to become a default feature for next-gen products: users add their fingerprints when activating the card and can then authorize transactions with no need of PINs or external devices. Mastercard and Visa have already developed this kind of solutions, that are being rolled out by banks such as NatWest.
Zwipe goes one more step beyond by embedding its fingerprint technology in wearables: not only a goundbreaking payment tool, but also a source of highly valuable financial-biometric data driving new services yet to be envisioned.
5. The end is the beginning
Openness, access, hybrid technology. If payment cards have a future — and we Enhancers are pretty sure they have one — this is where we all should start designing it. The evolution of fintech involves rethinking plastic too.
Roberto Maggio is Partner, Director of Content e Head of Verbal Design at Enhancers. He’s been teaching digital marketing and growth hacking at IED, at Università Cattolica in Milan and at the Interaction Design course of ITS ICT in Turin.