# Are payment cards under threat? Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2018-12-18 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: The Future of Credit Card Payments: Evolution and Disruption Meta Description: Discover how the payment industry is changing and what card providers need to do to stay ahead in this competitive landscape. Stay informed with Cognizant. URL: https://financedigest.com/payment-cards-threathtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/are-payment-cards-under-threat-1736840171926-compressed.jpg) _**Abhijit Deb,** Head of Banking & Financial Services, UK & Ireland, Cognizant_ Consumers do not only compare how easy it is to make payments when buying goods with traditional providers, but also with other such as Amazon, PayPal and Google. As a result, they have expect payments to be easy, convenient, flexible, secure – in some cases they even want to be [rewarded for making transactions](http://uk.creditcards.com/reward.php). Customers will not stay loyal to their card providers if the service no longer meets their needs or expectations. As a result, we are entering an age where [payment industry](https://www.financedigest.com/end-of-year-overview-of-the-payments-industry.html "End of year overview of the payments industry") providers either have to be the source of transformation or face disruption from competitors challenging their market share. To avoid the latter, card providers should [continue to innovate](https://www.financedigest.com/the-bone-and-joint-health-supplements-market-growth-is-to-be-defined-by-innovation-continuously.html "The Bone And Joint Health Supplements Market Growth Is To Be Defined By Innovation Continuously"), creating new capabilities and features to bring greater security, added-value services, collaboration and convenience for their clients. **The future** [credit card](https://www.financedigest.com/credit-cards-how-to-choose-a-credit-card.html "Credit Cards: How to choose a credit card") The shift in the payments landscape over the past few years has brought a substantial evolution in the role of [payment cards](https://www.financedigest.com/why-latin-america-chose-biometric-authentication-for-payment-cards.html "Why Latin America Chose Biometric Authentication for Payment Cards"). This transformation has not only impacted the types of cards that companies are launching – for example, Gemalto has developed [fingerprint recognition credit cards](https://www.gemalto.com/press/pages/gemalto-launches-the-first-biometric-emv-card-for-contactless-payments.aspx) – but has also affected card providers’ strategies and aspirations. But how long will we keep physical cards in our wallet? Will the move to cashless lead us to ultimately become wallet-less? Payment networks like Visa, MasterCard, Discover and American Express have built a massive infrastructure, also known as ‘payment rails’, for processing transactions globally. As purchasing trends shift online, credit and debit cards are increasingly being used more for their ‘rails’ than for the traditional [plastic](https://www.financedigest.com/the-plastic-cards-market-to-grasp-through-the-fine-courses-of-novelty.html "The Plastic Cards Market To Grasp Through The Fine Courses Of Novelty") card we use in-stores. Thus, the battleground for card providers is how to remain the default payment option across every channel, keeping them in the top spot in a spender’s [digital wallet](https://www.financedigest.com/digital-wallets-the-new-way-to-pay.html "Digital Wallets: The New Way to Pay"). Apart from the obvious revenue advantages associated with being a preferred payment choice, such as interchange fees and interest charges, card providers with ‘top of the wallet’ status also have access to a rich pool of information. By harnessing data, card companies can provide an innovative and hyper-personalised customer experience to differentiate themselves or create a new stream of revenue, as seen with companies such as Google [recently purchasing](https://www.bbc.co.uk/news/technology-45368040) Mastercard credit card data to track users’ spending. **Evolving competitor landscape** With the incursion of the concept of ‘digital cards’, card issuers and their corresponding [business model are under threat](https://www.financedigest.com/the-best-ways-to-protect-your-business-from-cyber-threats-in-2021.html "The best ways to protect your business from cyber threats in 2021"), no matter what position they hold in the rank. [Card providers have access to increasing amounts of payment](https://www.financedigest.com/fingerprints-supports-two-more-biometric-payment-card-launches-in-the-mena-region.html "FINGERPRINTS’ SUPPORTS TWO MORE BIOMETRIC PAYMENT CARD LAUNCHES IN THE MENA REGION") and account information, and more assertive competitors are moving quickly to commercialise the opportunities. Online players, like PayPal and Square, are already poised to take a bigger [industry lead over traditional credit card](https://www.financedigest.com/virtual-cards-will-help-lead-the-travel-industry-into-a-post-pandemic-boom.html "Virtual cards will help lead the travel industry into a post-pandemic boom") issuers thanks to their established online presence. And, as their dominance grows, we are likely to see other [digital players enter the payments](https://www.financedigest.com/why-anti-spoofing-fingerprint-technology-is-essential-for-the-continued-growth-of-digital-payments.html "Why anti-spoofing fingerprint technology is essential for the continued growth of digital payments") space. Amazon, for example, is well known for having a [business plan](https://www.financedigest.com/hyperspectral-imaging-system-market-know-latest-trends-forecast-for-long-term-business-planning-up-to-2026.html "Hyperspectral Imaging System Market – Know Latest Trends & Forecast for Long-term Business Planning up to 2026") for every industry – and it is likely payments will not be any different. Having just launched a [small loans service to SMEs](https://www.cbronline.com/uncategorised/amazon-offer-small-business-loans-uk/), it is not hard to extend the logic to where Amazon is your bank and runs your entire network by Amazon “rails”. And the same could easily be said for Apple. We may also see social media players get involved, coupling their user data with account information to provide quick credit checks or [banking services](https://www.financedigest.com/the-gmp-cell-banking-service-market.html "The GMP Cell Banking Service Market"). **So, what does this mean for traditional card providers?** Firstly, it is clear that [marketing strategy](https://www.financedigest.com/fortified-dairy-products-market-outlook-cover-new-business-strategy-with-upcoming-opportunity-2022-to-2032.html "Fortified Dairy Products Market Outlook Cover New Business Strategy with Upcoming Opportunity 2022 to 2032") can no longer be centred around a piece of plastic. Marketers must challenge themselves to think about how they can propagate brand loyalty and [acquire customers](https://www.financedigest.com/can-banks-acquire-customers-with-biometric-payment-cards.html "Can banks acquire customers with biometric payment cards?") in this changing market. At the moment, a vast amount of customer [acquisition](https://www.financedigest.com/rationalfx-drives-customer-acquisition-with-regtech-platform-from-trunarrative.html "RationalFX drives customer acquisition with RegTech platform from TruNarrative") is achieved by cross-selling to other customers with partnerships. For example, the British Airways / American Express credit card enables consumers to collect Avios points on their day-to-day transactions. And how do they compete on the [digital landscape](https://www.financedigest.com/smart-becomes-the-first-ssp-to-collaborate-with-white-bullet-to-safeguard-quality-in-the-digital-media-landscape.html "Smart becomes the first SSP to collaborate with White Bullet to safeguard quality in the digital media landscape")? Many providers are racing to position themselves as the [customer’s ‘digital front door’ to take advantage of additional account](https://www.financedigest.com/covid-19-has-made-your-customer-accounts-more-valuable.html "Covid-19 has made your customer accounts more valuable") information. Card providers need to act fast to stay relevant. In the short to mid-term, credit card providers must focus on trust. Currently, thanks to consumer [banking regulations](https://www.financedigest.com/exclusive-china-regulator-launches-new-probe-into-banks-property-loan-exposure-sources.html "Exclusive-China regulator launches new probe into banks’ property loan exposure – sources"), clients have the peace of mind that if a card gets stolen, they are protected. For the time being, Apple [Pay and other providers are not offering](https://www.financedigest.com/uk-trial-lawyers-to-end-strike-after-accepting-government-pay-offer.html "UK trial lawyers to end strike after accepting government pay offer") the same assurances to customers yet. However, when mobile payments start offering the same guarantees, what can card providers do to stop people switching? In the long term, card players [must ensure that they do not find themselves consigned to the role](https://www.financedigest.com/advisors-must-play-a-bigger-role-in-unlocking-scale-up-potential.html "Advisors must play a bigger role in unlocking scale up potential") of the faceless underwriter. Card providers need to think about their role in the entire financial services ecosystem and create new, [innovative services](https://www.financedigest.com/accelerating-financial-services-innovation-with-the-promise-of-data-mesh.html "Accelerating financial services innovation with the promise of data mesh ") that respond to customers’ needs. Many forward-looking players are looking to launch offerings such as 360-degree views and financial [management advice services](https://www.financedigest.com/cyclic-innovation-to-drive-the-medical-case-management-services-market.html "Cyclic innovation to drive the Medical Case Management Services Market"). By combining machine intelligence with data, other providers are already exploring how technology can [create new customer and colleague experiences](https://www.financedigest.com/customer-experience-creating-the-calm-in-the-chaos.html "Customer Experience: creating the calm in the chaos") that are simple, fast, transparent and engaging. For example, American Express’ personal travel assistant app, Mezi, uses AI to help cardholders pay for vacations and business trips based on their preferences. Similarly, Bank of America’s virtual AI assistant Erica is helping clients with effective [money management](https://www.financedigest.com/fine-tuning-your-money-management-skills-today.html "Fine-tuning your money management skills today"). Only by creating these value-added [services that respond to specific consumer needs can card providers avoid complete industry](https://www.financedigest.com/financial-services-industry-blazes-the-trail-for-cloud-migration-post-pandemic.html "Financial services industry blazes the trail for cloud migration post-pandemic") disruption and stay relevant. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---