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Credit Card Applications » News » Card Issuers » Experts Predict Cash and Credit Cards to be Extinct by 2020

Experts Predict Cash and Credit Cards to be Extinct by 2020

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Dinosaurs, dodo birds, wooly mammoths … cash and credit cards?

Everyone knows that smartphones and mobile technology are changing the way we do almost everything these days, from shopping to communicating to entertaining our toddlers in the backseat of the car. But do any of us really expect to no longer be carrying cash and credit cards in our wallets within eight short years?

This week The Pew Internet Project and Elon University`s Imagining the Internet Center released the results of a study they did, asking Internet stakeholders and other experts in the field to envision the future, and tell us what they think our wallets will look like in 2020 – if, in fact, we still carry wallets at all.

What Do You Do With Your Phone?

Pew Internet has conducted a number of recent surveys that showed the following statistics:

  • One in ten Americans have made a charitable contribution by text message
  • One-third of smartphone owners have used their phones to pay bills or check account balances
  • 46 percent of people who use apps have purchased them with a mobile device

The Federal Reserve published a report of its own last month, saying that:

  • 21 percent of mobile phone owners used mobile banking services in the last year
  • 11percent of those who had not done so planned to in the next year
  • 12 percent of mobile phone owners have made payments via phone

Agree or Disagree?

In the Pew/Elon University Study, the respondents were asked whether or not they agreed with the following statement:

“By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. Cash and credit cards will have mostly disappeared from [. . .] advanced countries.”

A whopping 65 percent agreed that cash and credit cards are on their way out and will have mostly disappeared by 2020.

The Pew/Elon folks then turned the statement around and asked study respondents whether they agreed:

“By 2020, payments through the use of mobile devices will not have gained a lot of traction as a method for transactions. [Consumers are too concerned] about the safety of their money. Cash and credit cards will still be the dominant method of carrying out transactions in advanced countries.”

Only about 33 percent of the surveyed group agreed with this statement, consistent with 65 percent saying that cash and credit cards were headed for extinction.

Experts Weigh In

  • Harvard professor and former tech policy assistant for the Obama administration, Susan Crawford says, “There is nothing more imaginary than a monetary system. The idea that we solemnly hand around printed slips of paper in exchange for food and water shows just how trusting and fond of patterned behavior we human beings are. So why not take the next step? Of course we`ll move to even more abstract representations of value.”
  • Director of technology at WGBH in Boston, Peter Pinch sees it this way: “I see ‘credit cards’ as already virtualized, electronic currency. The form factor and functionality of the card doesn`t really matter: I`m already making an electronic transaction and I expect all the affordances of such.”
  • John Pike, director, thinks that “So many people are already accustomed to buying a cup of coffee with a credit card that smart-device swiping is only a very small next step.”
  • In the pro-cash and credit card camp, Jeff Eisenach of Navigant Economics, LLC, believes that “Cash – tangible, hold it in your hand dollars – has been around for millennia. It won`t go away in a decade.”

Before we all get too excited about the future of mobile payment and the disappearance of currency, however, one anonymous survey respondent reminds us that if we rely on our electronic devices to pay for everything, “…if you run out of batteries, you temporarily run out of money.”

What do you think? Will a wallet be as much of a novelty as a rotary-dial phone in the very near future? Weigh in below in the comments section and tell us your opinion!

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