Once upon a time, our phones could only call other people. That progressed to T9, then full mechanical keyboards that would flip or slide out of the first smartphones. Touchscreens, apps, step counters, fingerprint sensors… Now our phones can control our thermostats, lock our doors, operate our home security systems. We’ve already trusted our phones with all our personal relationships, preferences, and security. The next step is to trust them with our finances.
Mobile payments are becoming more common as time goes on, but will they ever really become the norm? And what about all the other things we keep in our wallets besides money? Will we ever say goodbye to the physical wallet?
Ditching the Card
The death of cash has been slow; of course, it’s still accepted and widely-used. But cash has several disadvantages over a card. Whereas your card does have a credit limit, carrying that amount in cash would not only be inconvenient, but dangerous. Cash has a wider accessibility. If I use a dollar bill to pay for a soda, it doesn’t matter if I pulled that dollar bill from my wallet or if I lifted it from your back pocket. A card, however, is more difficult to use if you’re not the owner. Debit cards require a PIN, and even credit cards can be tracked down or deactivated.
Mobile payments offer all the advantages of a credit card, but enhanced. They typically require fingerprint authentication. This capability resides in a device that you already carry around everywhere anyway. The one disadvantage is that not every store has this option yet, so it’s still necessary to carry a card. However, once that’s changes, there should be no barriers to mobile payment.
What About Everything Else?
However, your wallet doesn’t just hold your money. It also holds your driver’s license, proof of insurance, loyalty cards, and random receipts from your local pizza joint. Where will we hold these things?
Well, probably in our phones, along with everything else. A digital driver’s license is already being considered by some states. Car and health insurance carriers also frequently offer apps that allow you to pull up your proof of insurance on your phone within seconds, often requiring fingerprint verification or a password. Additionally, loyalty cards and receipts have already migrated onto your phone as well.
The only other things that people commonly keep in their wallets are photos, and those have long since gone digital. The little nick-nacks that some might keep within the flaps, like old business cards or pieces of gum, might end up in trash cans sooner rather than later without a wallet, but perhaps that’s for the best.
When Can We Ditch Our Wallets?
The answer depends a lot on where you live. If you’re in a major city and find yourself only shopping at major retailers, the answer is probably now. On the other hand, if you live in a smaller town or shop frequently at local businesses, it might be a while. However, eight in 10 millennials believe that a completely paperless future is coming. Ultimately, the switch to digital wallets will depend on how quickly mobile payments are accepted by retailers.
There is a disadvantage for small retailers to purchase the device, however. They don’t want to invest in the hardware to read the card on your phone when they already have a perfectly good way to run your physical credit card. However, as more and more large businesses accept mobile payments, small retailers will feel the pressure. The best case scenario is 2021, but it will likely be longer than that. It is clear, though, that we will eventually have to say goodbye to the traditional wallet. We will close it for a final time; we’re just not sure when.
Still using a credit card? Visit our credit card resource center for tips and guides.
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