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The Future of Credit Cards
From its humble beginning as a simple charge card printed on cardboard, the credit card has evolved quite a bit to become the sophisticated, secure payment method now used around the world.
This infographic explores payment technologies along with the forecast for each one in the future of credit cards.
Contactless Credit Cards: RFID and NFC
While traditional credit cards work by storing user information on a magnetic stripe, radio frequency identification (RFID) technology now comes standard on most new credit cards. Each RFID-enabled credit card contains information about itself and its owner in a small microchip inside the card, which remote machines can read from several feet away without needing to be "swiped" by the user.
Similarly, passive near field communication (NFC) chips in credit cards transmit information when they are placed a few inches from an external reader. Because of their shorter range, NFC-enabled credit cards are considered more secure.
Both RFID and NFC-enabled credit cards allow for contactless payment, and neither one requires an internal power source.
Storage capacity of RFID-enabled credit cards: up to 100 times greater thann magnetic stripe credit cards.
35 million RFID-enabled credit cards in circulation in the U.S.
Market for contactless cards, tickets, and systems $4 billion by 2020
Market for chipless RFID tags $2 billion by 2017
Market for NFC chips 135% yearly between 2011 and 2015
Problem: RFID-enabled cards can be scanned by unauthorized devices
Solution: A portable Faraday cage - a mesh shield that blocks radio signals
First NFC prepaid card: the EZ-Link Imagine American Express prepaid card for Singapore in 2012
Cell Phone as Credit Card: NFC Mobile Payments
In addition to the passive NFC chips found in credit cards, there are also active NFC chips that make two-way communication possible, providing a potentially safer method of payment. These active NFC chips, which require an internal power source, are found in some new smartphones.
35 million NFC-equipped phones sold in 2011
2.5 million NFC-ready point-of-sale terminals shipped in 2011
20% of smartphones equipped with NFC technology by 2014
Number of NFC-capable smartphones 300 million by 2014
North America is the biggest market for NFC-enabled smartphones.
Cell Phone as Wallet: Mobile Payments
As mentioned in the section on NFC-enabled smartphones, many modern mobile phones are equipped with NFC technology allowing them to effectively be used as credit cards. But this isn't the only type of mobile payment technology consumers use. There are also mobile payment platforms that allow the user to send money to merchants, direct carrier billing options that add the charge to the user's phone bill, and proprietary mobile platforms that work as mobile store credit cards.
Number of active credit and debit accounts globally 1.3 billion
Number of active mobile phone accounts 5.3 billion
50% of people worldwide use financial services
Global mobile phone penetration 87%
Estimated size of mobile payment transactiions by 2015 $670 billion
62% of American smartphone owners willing to use their phones as mobile wallets
Dynamic Stripe Technology
Dynamic stripe cards are reprogrammable, allowing them to mimic many different types of cards. A soon-to-be-released dynamic stripe card called Echo, developed by Protean, can be programmed to mimic other credit, debit, loyalty, and ID cards. The information from these cards is first loaded into the user's smartphone, then transferred to Echo via Bluetooth. Echo can only replace magnetic strip cards, not RFID or NFC cards.
Number of cards Echo can hold at once 3
Anticipated release 2013
Expected cost of Echo card $80 to $100
Duration of Echo card's battery 2 years