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Sunday 23.09.2018 | Name days: Vanda, Veneranda, Venija

Economists: future to bring alternatives to bank cards

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RUIt is not expected mobile phones will replace bank cards in the nearest five years, yet alternative payment settlements will definitely co-exist along with the traditional ones. Moreover, people need time to adopt to the new solutions, according to the business news portal BNN economists survey.

In terms of cards safety, standards of international cards organizations (VISA, MasterCard) are being met. To give an example, Latvian banks are not allowed to issue payment cards without chips. In addition, since January 1, there are also new and safer standards for chips. Traders who accept card payments must ensure processing cards with chips as well. Given the fact these security standards are updated all the time, security concern will definitely not rank among the reasons for banks to abandon payment cards.

Most likely, they will launch new payment settlement products, including, mobile payments to co-exist parallelly with bank cards. It will all depend on the choice of the clients. If they are no longer willing to use cards and start opting for more modern means of payment, also banks will have no point in issuing the traditional plastic cards, Andis Zariņš, head of Danske Bank Cash Flow and Electronic Payment department, told the BNN.

Speaking about banking cards safety, the greatest challenge lies in the high security standards which do not apply to all regions worldwide. Many regions still allow payments with mere reading of the magnetic stripe. Consequently, this gives way for fraud. However, banks are carrying out measures to prevent any fraudulent activities and minimize risks, he says.

Cards is a good replacement of cash for daily deals. Having spiked 10%, compared to last year, card payments make up 70% at stores, leaving only 30% for deals in cash, says Ināra Tiltiņa, head of Swedbank Daily Service department.

She adds the card is practically an identification card where its authenticity, personal identification number (PIN), current account and other details can be checked within 10 seconds from any part of the world.

New solutions have their own advantages. However, it takes time to convince payment makers and receivers that the new solution is more convenient, cheaper and beneficial for it to make the entire world change its payment habits. Therefore, it is not likely mobile phones will replace bank cards in the coming five years. Yet, the process will take its place, for example, in small purchases, Tiltina emphasizes.

While Citadele Bank board member Guntis Beļavskis believes banks are able to develop alternatives to payment methods such as contactless cards, electronic money and others. Such payment card companies as American Express, MasterCard and Visa will keep working on this issue, because such changes affect hundreds of millions of people around the world and no bank is able to carry out such revolution on its own.

So, I think that in the nearest five-year period alternative payment methods will co-exist with bank cards. This is evidenced by the fact that, for example, Internet bank and mobile payments have existed for at least five years and, to date, bank cards have not disappeared from the market. On the contrary – they are playing an even more important role in reducing payments in cash, Beļavskis indicates.

Also Nordea Bank points out to the business news portal BNN payment cards will not lose their functions after five years.

BNN already reported, for the purposes of data protection, the Gulf countries intend to stop using bank cards in the next five years, replacing them with mobile and electronic payments.

Given that the Gulf countries are particularly vulnerable to cyber crime, banks hope to put an end to schemes by promoting Internet and mobile services.

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  1. Tian says:

    Looking forward to better payment options.

  2. Sailor says:

    These tiopcs are so confusing but this helped me get the job done.

  3. Emmy says:

    Yo, good loiokn out! Gonna make it work now.

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