Reducing Plastic: One Card at a Time06.11.2018
Society has noted in recent years the amount of environmental damage caused by our human habits. Driving gas-fuelled cars, using unnecessary amounts of water and wasting energy all contribute to hurting the environment. People have learned to consider walking or riding a bike before driving a car, cutting down on water usage and finding different forms of energy in order to conserve the non-renewable resource. Why stop there? Plastic cards are contributing to the plastic epidemic that is taking over our oceans.
Enough plastic is thrown away each year to circle the earth four times. According to the International Card Manufacturers Association (ICMA), roughly 6 billion credit cards are produced each year by card manufacturers worldwide. Plastic cards are replaced every two years, and that’s not even including the cards that are lost, stolen or thrown out before expiration. The 12.7 million tons of plastic getting dumped into our oceans every year has catastrophic consequences to marine life.
Not only does the amount of plastic cards being replaced contribute to the waste in the oceans, but it is also a large cost to card issuers. The easy solution to the waste problem and cost to card manufacturers would be switching to frictionless payments.
According to Statista, the total revenue of global mobile payments market has been increasing rapidly from 2015 to now, and will continue to grow through 2019. With worldwide mobile payment revenue at $450 billion in 2015, the market is expected to surpass $1 trillion by 2019. Mobile wallet transactions allow for the card to not be present because its details are loaded onto mobile pay apps. Do users use the apps because they still have the physical card? Does the physical card seem comforting because there is a greater sense of ownership?
Security Is Top Priority
Frictionless payments are becoming more popular but consumers still prefer to use physical cards for higher-cost sales. The industry is exploring biometric validation that offers less buying friction with no PINs or passwords to remember and no signature required, but those validation efforts generally are restricted to low cost sales.
Generally speaking, consumers are wary with change, but will accept it as time evolves. It took a while to adopt credit cards instead of cash, and now virtual payments sound dubious. In reality, virtual cards offer more security, as the app generates a one-use card number called a “token” every time a transaction is made. This prevents the exposure of card details and guarantees a high level of card security.
Power in the Cardholder’s Hands
Technology companies are catching onto the virtual payments revolution. Many solutions have come up, and some of those are mobile app card control systems. After countless data breaches in the recent years, consumers look for the most secure forms of payments.
Payment systems have come up with ways to fit the demands of consumers. Card holders can now decide when, where and how their cards are used by making changes dynamically on-the-go, from the convenience of their smartphones. Mobile apps make payment cards management into a smart process.
It is important that members ask their credit unions about their app possibilities. A lot of the payment technology systems are under a ‘white label’ to financial institutions, and offer the best security options. A customer should look for an app that offers location-based card controls, secure card number tokenization and easy card management in real time on a smartphone.
Location-based card controls becoming more common and more useful as time goes on. Losing plastic cards is a common dilemma, and phoning the card emergency number to report a lost card then have one sent back is a nuisance that can easily be avoided. With card controls on an easy-to-navigate app, just toggle the switch to easily turn the card off. Better yet, location-based card controls allow the card user to set parameters for where the card is allowed to work. They can be set along car routes, in certain states or in certain diameters.
This system can be useful for both businesses and families. Trusting an employee to use the company card only in certain locations on a business trip is now easier than ever. Similarly, families can give their child a credit card tailored to specific stores and locations, for example, in their college town only. The system offers many card benefits for the card holder, making the card that utilizes these controls the “top of the wallet” favorite. The level of security on top of convenient control benefits makes cards with these features the obvious choice.
Let’s Leave the Plastic at Home . . .
The IoT (Internet of Things) is changing the financial technology conversation. Card control technology paired with IoT devices offers even more possibilities.
With IoT, the exchange between a smartphone device and the goods or service provider becomes seamless and invisible. Payments providers have already taken advantage of the IoT in different industries. For example, parking lots can log a car license plate number and automatically bill the driver, removing the friction of a ticket. Amazon is experimenting with the Amazon Go store, where just having the mobile app on a smartphone guarantees entry and payment for the goods.
It is a common misconception that a physical plastic card is the only way to process payments. Clearly, this is becoming the case less and less. The plastic card is a way to physically hold the number and data associated with the account. In this case, the “virtual card” would work just as well. Why waste the plastic?
Ondot Systems is a provider of provides solutions that allow cardholders to control how their cards can be used through their smartphone.