Mobile wallet: why credit cards are not the future

Bill Zielke

Paypal: Bill Zielke

Bill Zielke, senior director of Merchant Services at Paypal, dropped by Mashables to talk about why credit cards are not the future of online payment.  He made a good case for why credit cards don’t work for online commerce but also made the point that soon mobile devices will also challenge the credit card industry

“In fact, I’d argue we’re now at an inflection point, as recent global economic woes have combined with the continued rise of alternative payment methods to finally mount a serious threat to the traditional credit card. In fact, in a recent report by Javelin Strategy & Research noted that “online use of credit cards continues to decline, representing a sustained and ongoing change in consumer behavior,” before going on to state that total payment volume from credit cards fell from 44% in 2009 to 40% in 2010.”

“The mobile device holds the key to the future of payments, for both consumers and merchants, because it blurs the lines between online and offline. I predict it won’t be long before the credit card will be the alternative payment method and services that were designed for the online experience from the start will become the norm.”

The Paypal Express check out on mobile devices provide a good overview of how mobile devices are currently able to process transactions.

Paypal Express check out

Figure 1. Express Checkout on mobile devices – buyer pays on your mobile website

With the market penetration of devices with NFC chips and payment systems like the one proposed by Isis, Apple and Google, the future of credit cards seems in doubt.

About Daniel Davenport

Daniel is a digital media executive with internet and broadcast experience. Daniel is currently the executive strategy director at THINK Interactive.

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