Are plastic cards in danger of obsolesence? Don't shred your plastic credit or gift cards just yet.
Even if cellphone chips replace the ubiquitous credit card, the fees we are used to will remain or even increase.
You may very well wave your cellphone over a retail console to buy just about anything within a couple of years, obviating the need to carry around much of what’s in your wallet.
That might sound super cool, but aside from learning a new swipe, not much else will change from the way we use credit cards today.
“Visa and MasterCard are so universal at this point that the barriers to entry for any new payment system are almost insurmountable,” said IDC Financial Insights practice director for payments and security Aaron MacPherson.
As a result of that and other factors mentioned below, the fees, interest charges and markups that plague credit card customers on both sides of the customer/merchant equation will undoubtedly persist on smartphones.
Credit card companies typically charge merchants around three percent of the purchase price when a customer pays by card. That drives up the price of all goods, regardless of how you, personally, pay, because merchants have to pass those extra costs to consumers somehow.
And unfortunately, the credit card industry appears to be an example of the rare market that cannot be disrupted by new technology — for now, anyway.
Read More http://www.wired.com/epicenter/2010/08/phone-credit card/all/1