Are Credit Cards About to Be Dethroned?
I came across a very interesting article on the change in making payments, which is moving towards a more online approach.
The retail industry is traditionally slow to adopt new technology and new payment methods, but once some retail leaders get comfortable with the idea, it can snowball into a very rapid trend.
It’s happened with self-checkout, buy online and pickup-in-store and—most recently—with contactless payment. Are alternatives to credit cards next? Although Visa, MasterCard and American Express have substantial staying power, several recent events suggest a challenge to the three Princes of Payment unlike anything retail’s ever seen.
Earlier this month, a company released the results of a practical survey it conducted, where its analysts visited the top 100 largest E-Commerce sites to see what payments they accepted. Alternative payments for that survey were Google Checkout, EBay’s PayPal and Bill Me Later.
Between a visit in October 2006 and a follow-up in February 2007, acceptance of alternative payments soared 267 percent. Note: This wasn’t an opinion survey of either consumers or retailers. This was an elegantly simple tactic of looking at their sites. For the credit card companies, that’s strike one.
Then came word last week that Wal-Mart is bucking the industry trend by supporting e-Check procedures. That will allow the chain to electronically accept checks, a move that one Wal-Mart exec estimated would save a billion dollars a year. Even though most retailers had declined to support e-checks, the backing of the $345 billion chain is going to cause many retailers to reconsider. That’s strike two.
This week, word came down that two major national retail chains will start accepting—on a trial basis—Bill Me Later payments in their stores. If successful, this could signal the quick migration of alternative payments from merely online to brick-and-mortar. That’s strike three.
Source:http://www.cioinsight.com/article2/0,1540,2121530,00.asp
What are your thoughts? I would think as large as Visa and Mastercard are that if they felt threatned enough from new forms of payments they would jump into that arena as well. I don’t see an end for credit cards do you?