Card-based payments have never been more popular. Even before the Covid-19 pandemic struck, Americans were opting to make purchases with their cards instead of cash. As coronavirus cases skyrocketed, consumers began to worry about the cleanliness of cash.
Now, we’re well on our way to a cashless society. Thanks to cash-sharing apps, contactless cards, and mobile payment options, paper bills may be going the way of the dinosaur.
As the cashless trend continues, credit and debit cards will become even more powerful and feature-packed. Here are five debit card innovations that promise to make payment easier and more secure for their users:
1. A Universal Card
The idea of a universal card isn’t necessarily new. Several companies have already tried to create their own version. Take Coin, for example. A few years ago, this tech startup launched a universal card that combined all credit cards, debit cards, and even loyalty cards.
Coin was the size of a normal debit card. But its interface let users cycle through their stored cards so they could choose which one they wanted to use at a given time. With this secure smart payment device, people didn’t have to walk around with a full wallet. They could take one card with them and have access to all their accounts.
Unfortunately, Coin didn’t succeed. But that doesn’t mean it wasn’t on the right track.
Universal cards are likely to make a comeback because of the ease of use and freedom they offer. Whether cardholders are traveling across town or around the world, these cards make it easier by keeping all their payment options available in one place.
2. Enhanced Authentication
Credit and debit card fraud has surged in recent months. And while PINs and passwords can help keep consumers’ financial data safe, cybercriminals are becoming savvier and more creative by the minute. Because of this, cardholders will need enhanced authentication to keep their information secure.
Both Visa and Mastercard have launched biometric payment cards, which require the cardholder’s fingerprint to verify each transaction. Chances are good that every credit and debit card will utilize this feature in the near future.
As we transition to an increasingly cashless society, debit cards will likely store more than our financial data. In theory, they could grant secure access to other sensitive information, such as medical records.
3. Automated Budgeting and Savings
In the last few years, there’s been significant development of fintech apps. Mobile apps like Chime, Nubank, and MoneyLion have made banking easier for their users. These apps let people transfer money between their accounts, track their spending, and more.
While fintech apps already leverage the latest technologies, experts expect them to do so even more in the coming years. AI is currently used to detect credit card fraud and to help users manage their finances, and its capabilities will likewise grow more sophisticated.
In the future, artificial intelligence could use algorithms to create budgets for cardholders and send reminders to ensure they stay on track. Just as investment apps let users choose pre-built plans based on their risk tolerance, banking apps may give users customized budget options.
If a cardholder’s paycheck is smaller one month, they may receive a “skinny” budget recommendation. But if they receive a bonus, they may see increased allotments in discretionary areas like food, entertainment, and travel. And if they lose their job, the AI may suggest a prioritization scheme for paying outstanding bills.
By analyzing users’ spending, an AI-enabled card could help them save money. With their permission, it could cancel money-squandering memberships. If an insurance bill is high, it might point them to thriftier plans. With utility and cable companies, the AI may even renegotiate their bills.
4. New Tap-and-Go Payment Options
Tap-and-go transportation already exists in some places. For example, in London, residents can use contactless cards to ride the London Underground. The New York City subway system began rolling out the same capability in 2019. This payment option saves time, improves the transit experience, and cuts down on fare fraud.
These systems work by using a contactless technology called near-field communication (NFC). When a card contains an NFC chip, users can pay by simply waving that chip over the point-of-sale terminal.
Instead of having to wait in line to buy a subway ticket or load a transit card, people will be able to use a contactless card for all their public transportation needs. In the future, tap-and-go will likely be the only way to pay for public transportation.
5. Comprehensive Debit Card Controls
Eighty percent of consumers prefer using cards over cash. As that figure grows, so will the volume of data breaches. Banks will have to implement comprehensive debit card controls so users can keep their information secure.
Here are a few examples of what those controls could look like:
Users will be able to turn their cards off and on instantaneously via a mobile app, regardless of which debit card they use. This way, if a debit card is lost, users can quickly deactivate it.
Spending limits are a great way to keep fraud at bay. In the future, banks will let cardholders set threshold amounts for certain transactions. If a payment goes over that amount, the transaction will be declined. This feature will also help individuals make better financial decisions.
Users will be able to set specific locations where their cards can be used. For example, if they only want transactions to work in their own ZIP code, they can specify that. They’ll also have the ability to receive alerts in real time about what’s being charged to their account and where. This way, if they don’t recognize a payment, they can quickly take action.
There are endless possibilities for how debit cards will be used in the future. But one thing is certain: Cash will soon be a thing of the past. Soon every payment will be via some sort of card. And as technology advances, paying with cards will only become more convenient and secure.
Interesting related article: “What is a Digital Wallet?“