Future of Credit Cards

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 From its humble beginning as a THE FUTURE OF mple charge card printed on CREDIT CARDS 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 fre- quency identification (RFID) technology now comes standard in most new credit cards. Each RFID-enabled credit card con- tains information about itself Storage capacity of RFID-enabled credit and its owner in a small micro- chip inside the card, which remote machines can read from several feet away without need- ing to be "swiped" by the user. cards: up to Similarly, passive near field com- munication (NFC) chips in 100 credit cards transmit information times greater than magnetic stripe credit cards 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 35 million credit cards allow for contactless payment, and neither one re- quires an internal power source. 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 $2 billion Problem: RFID-enabled First NFC prepaid cards can be scanned by unauthorized devices card: the EZ-Link by 2017 Imagine American Express prepaid card for Singapore in 2012 Solution: A portable Faraday cage-a mesh shield that blocks radio signals Market for NFC chips 135% yearly between 2011 and 2015 Cell Phone as Credit Card: NFC Mobile ЕCНO> Payments In addition to the passive NFC chips found in credit cards, there are also active NFC chips that make two-way communication possible, providing a potentially safer method of payment. These active NFC chips, which require an internal power source, are found in some new smartphones. 2$ Dynamic Stripe Technology 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 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 $ $ 35 million cards. The information from these cards is first loaded into NFC-equipped phones sold in 2011 the user's smartphone, then transferred to Echo via Bluetooth. Echo can only replace magnetic strip cards, 2.5 million not RFID or NFC cards. that work as mobile store NFC-ready point-of-sale terminals shipped in 2011 credit cards. Number of active credit and Number of cards Echo 20% debit accounts globally can hold at once 1.3 billion of smartphones equipped with NFC technology by 2014 Number of NFC-capable smartphones Number of active mobile 300 million phone accounts 5.3 billion Anticipated release by 2014 50% Global 2013 mobile of people worldwide phone penetration use North America 87% financial services is the biggest market for NFC-enabled Expected cost of Echo card smartphones. $80 to $100 Estimated size of mobile payment transactions by 2015 $670 billion 62% Duration of Echo card's battery of American smartphone owners willing to use their phones as mobile wallets 2years TM Sources: Time, Springer-Verlag Berlin Heidelberg, Zebra Technologies Corp., Consumer Reports, IDTechEx, RFID Canada, TechNavio, ZDŇET, Protean Payment, IMS Research, Berg Insight, Juniper Research, First Data Corp., The Financial Access Initiative, Ericsson, MasterCard CreditDonkey CreditDonkey.com helps tech-savvy consumers with "donkey-proof" (easy to understand) financial tips and deals. %24 %24