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is innovation still taking place on plastic cards?

Payment cards have been present in most wallets for decades now, so it was only natural that, once the digital revolution came into full swing, many started believing the cards' days were numbered. Or that they would, at the very least, take their place next to the check as essentially obsolete but persisting due to customers being simply too accustomed to them to give them up.


INNOVATIVE FROM THE START

However, one needs not look any further than the Apple Card or the Revolut Card, both physical payment cards issued by until very recently firmly digitally focused companies, to see that payment cards have only begun to realize their full potential.

American Express, Mastercard and Visa are also involving themselves fully with innovations regarding payment cards, raising them to the next level. The days of a payment card being just a simple piece of plastic or - if you were an exclusive member - metal, are long past.

In a constantly evolving and shifting financial landscape, the payment card has proven extremely adaptable. Multichannel has been the word of the day with regards to payments for quite some time now, and cards have been responding to it, becoming "smart" by integrating chips as well as contactless technology, providing their holders with not just new ways of payment but also other features and services.


CONTACTLESS IS FAST AND EASY

Contactless technology is actually a perfect example that sums up the payment cards adaptability. A contactless smart card contains a small but sophisticated computer that allows wireless communication with a card reader via short-range radio frequency, providing speed, ease of use and security for both the card holder's identity as well as financial information.

First introduced in 2007 in the UK, contactless cards were at first considered just a curiosity but now, over a decade later, Europe is leading in contactless card adoption, with data from 2018 revealing that half of total transactions in Europe have been made using contactless cards. 

Recently, both Mastercard and Visa have made a significant step in the further development of this technology, demanding all-new card readers and payment terminals be contactless-enabled. Javier Perez, President of Mastercard Europe, when asked about the growing trend of contactless payments, was quoted as saying that various European markets are demonstrating swift adoptions of the technology as consumers increase their trust in the technology. He also added that:

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BIOMETRICS AND BEYOND

But contactless technology is about to lose its place as the current "big" thing when it comes to payment cards, with the advent of biometrics. We've already talked about biometric technology and its potential place in the financial world in the 10th issue of InPayments, and there have been many developments between then and now.

The most secure and error-free method to verify inherence – or the identity of the person – online is by using their fingerprint or some other unique biometric identification. Thus, there is a huge demand for biometric card payments, especially in the EU.

High security capabilities, cost effectiveness and convenience are the three most vital requirements when it comes to finance, access and ID cards; and biometric cards seem to satisfy these.

Both Mastercard and Visa have for some time now been performing trials of payment cards with a built-in fingerprint scanner, replacing the need for PIN numbers. But the two card giants are far from the only ones making a push for biometric cards - card companies and fintechs all over the world are currently involved with their own biometric research and development programs. The British NatWest bank began testing their own biometric card in April of 2019, stating convenience for cardholders and increased security as their main drives for introducing biometrics.

You might consider a biometric card - up to very recently a thing of science fiction - as appealing primarily to Millennials and Generation Z but market research has discovered something very interesting. Baby Boomers are showing an increased interest in biometric cards. The reason is simple: a biometric card requires no PIN, which means the elderly don't have to worry about forgetting it.

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All of this makes biometric payment cards enough to overcome any resistance from the traditionally less modern tech-savvy Boomers.


TURNING DIGITAL INTO PHYSICAL

We've mentioned the Apple and Revolut cards but what is it exactly that led to their creation? Well, fintechs such as Apple, Revolut, and N26 have been focusing on their mobile payment apps ever since the digital revolution began, with this expansion to physical cards being just that - an expansion of services and features. 

Revolut's Premium Metal card is a perfect example: one of its in-app services includes a concierge and it is exactly what you think of when you hear that word. The concierge service - an intelligent program that will not agree to illegal, unrealistic or inappropriate requests - helps the cardholder with anything from recommending hotels and bed & breakfasts, restaurants, bars and nightclubs or making reservations for plays, concerts or other events.