Tomorrow, Apple will officially kill the credit card

“Someday, your teenage child (or grandchild) will stumble across a credit card in an old desk drawer and ask you: ‘what was this for?'” Gene Marks writes for Forbes. “That day is imminent. The extinction of the credit card will officially begin tomorrow, September 9th.”

“As you’re probably aware, tomorrow is when Apple will announce a bunch of new products, updates and services,” Marks writes. “Up until now the major backer of the technology has been Google. But as popular as Android devices are around the world, it’s the iPhone that rules in the economies (i.e. the U.S.) that pay the bills. And Apple for years has instead resisted jumping on the NFC bus. That will change this week, according to all accounts. And the impact will be fast and enormous.”

“With this technology now on all of our smartphones we can not only get rid of our credit cards, but our keys, membership cards, drivers’ licenses and wallets. But first, it’s payments,” Marks writes. “Credit card numbers, now encrypted on your device will become more difficult to steal. All of this is great news for my clients and for you, as long as your business is ready. Using your credit card will soon go the way of the rotary telephone and visiting your bank branch to make a withdrawal. How soon will this happen? Very soon.”

Read more in the full article here.

Related article:
Apple to deploy tokenization + NFC for secure mobile payments, sources say – September 8, 2014

47 Comments

      1. I always saw an iWatch acting as a proximity-based lock on your mobile device. Every now and then (a minute, or a random number of seconds under a minute so it’s not easily predictable) an encrypted/tokenized heartbeat signal is sent from phone to watch, and if there’s no response (thief has stolen it and it’s out of range), it locks itself down until you fingerprint-unlock it again.

        This handily solves the problem of a thief turning Airplane mode on right after stealing it: even if Find My Phone can’t find it and lock/erase it, it’ll still lock it down. And if they power the iPhone down, the lock is enforced once it starts back up.

        An iWatch would presumably be highly visible, so a robber can threaten you and take both iPhone and iWatch at the same time. But if the iWatch has a biometrics layer on the back of the watch for health-monitoring sensors, your body probably has a unique enough signature that if contact is lost or sensor readings change drastically over the course of a minute, it’ll do a “check user fingerprint” prompt. Maybe even dial 911 on the assumption you’ve suffered a medical emergency… though the risk of false 911 calls and responses might be a serious liability.

  1. Going to the bank to withdraw funds will not disappear: that rightly belongs under the Cars-Trucks metaphor that the late Steve Jobs so accurately described years ago. It will still be around, because it still fills a need, but it will not be as commonly used.

    As for Credit Cards disappearing, the sooner the better. The US has been badly lacking in upgrading the current CC system, the magnetic-stripe business-card size piece of plastic, which has more security holes than Swiss Cheese. There has been much talk about converting to the European model of embedding a smart chip, but so far, no major action. If this pans out, this will be terrific news. As always, Apple leads, the others follow.

    1. “more security holes than Swiss Cheese.” Oh, so that’s what those holes in my cheese are. Security holes. I’m just not sure how they work or why I would want them in my cheese.

  2. The extinction of the credit card may START tomorrow, but it’s going to be a long time before it’s actually gone. Again, restaurants in the USA don’t yet have table side devices for NFC payments, nor do many of the big brand mall stores. They would have to upgrade to new devices like Verifones MX915 or MX925 terminals. That cost can be big if you’ve got multiple devices in thousands of stores to replace.

    Ironically, smaller “Mom & Pop” stores that have iPad registers may be earlier adopters than some big name brands.

    1. I would soon expect to see hand held payment devices based on the iPhone 6 so that small businesses can accept NFC payments.

      An iPhone or iPad may be moderately expensive, but unlike a dedicated portable payment device, it can do many other things as well.

    2. Many restaurants are happy to upgrade if it means a lower monthly fee. Essentially those terminals are rented, remember.

      In Canada, within a year or two, VISA/MC tap to pay have become ubiquitous. It’s a bit ominous, to be honest… as it makes it FAR too easy to buy on credit for the undisciplined.

    1. i’m not convinced on this. how close does the phone have to be to process order? i also like how places ask you to input your zip code to prevent theft. i hope this is still the case with NFC

        1. A thief probably does not know how to spell “zip code” let alone know where he/she is at let alone punch in the correct one while on the run. I am seldom shopping in the same zip code as the billing address.

          With regards to restaurants, Canada and Europe bring the cc machine to the table. Therefore, there is no need to retrofit tables.

          Apple store sales people carry cc machines with them. Easily replaced with NFC machines.

      1. Contact-less credit cards need to be very close to typical readers, that’s why some systems actually call them “tap and pay”. There’s usually a limit on how much you can pay with them per contact-less transaction, without having to require a physical chip-and-PIN for confirmation.

        Tap-and-pay is normally only used in places that need to quickly process lineups, like grocery stores so terminals at sit-down restaurants almost never support it.

        A fraudster could try and build a unit with a more powerful transmitter, but it needs to have an equally powerful receiver… and if it’s powerful enough to trigger responses from multiple cards in the area for the same transaction ID, the credit card companies will know something’s wrong and flag the transaction. That’s on top of the fake unit not having a properly registered merchant/terminal ID.

  3. A while back, I was considering buying stocks in the 4 major credit card companies. Past trends show them growing in step with the overall stock market and doing a bit better overall and during recessions. I’m glad I didn’t jump on that idea: mobile payments might not destroy credit companies over night, but it looks like it will put a big dent in their long term prospects.

    1. I don’t see it destroying credit companies at all.

      The world economy practically runs on huge amounts of credit debt, and unless Apple plans on tackling that issue themselves by acting as a bank with precise funds to debit from, the credit system will remain.

      Standalone credit *cards* however, which are the focus of this article, will start taking a back seat.

        1. I won’t pretend to really know what will really happen in the future. But if most people start using their phones to access credit services, wouldn’t that create a big opportunity for alternative payment systems to compete with the big credit companies on that mobile platform? If they start having to compete on an increasingly level playing field, credit card companies may be pressured to lower their transaction fees. The credit companies are still likely to succeed, but their prosperity doesn’t look as certain as it used to be in the plastic card only world.

        2. Didn’t mean to imply the credit card companies would be taking a back seat, just that their physical, branded cards would be used less and less as the phone becomes the payment vehicle.

          Think online purchases: you don’t need a physical card for that, right? Store the number, expiry and check code somewhere safe (e.g. iCloud keychain, secure file on your computer), and you never have to pull your physical card out of your wallet for a first/one-time online purchase.

  4. with NFC, will it still work if your phone battery is dead? that would suck if in in line paying for something and pull out my phone that is dead and still can’t finish transaction

    1. Happened to me while waiting in line to check in at the customs and I was late with my boarding card in my Passbook! Had to search for an outlet and load the iPhone. Almost lost the flight.
      When the battery is out there should be a few extra minutes possible in case :-), just to make it through the customs or make a payment.

    1. We trust it with checks now which are very insecure and multiple credit cards which are just as bad.
      This is very different and many orders of magnitude more secure.

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