With mobile digital finance still in its early stages, there is still a long way to go before mobile systems can hope to replace credit cards. Despite the millennial and gen-z generations leaning more into digital solutions for every aspect of their lives, the adoption of mobile wallets has been tepid according to a report from Business Insider.
What makes credit cards still indispensable for many people today is they help provide consumers with a healthy credit standing profile. This is very important especially when looking for apartments or even applying for a mobile phone plan. Having a good credit score helps banks and other parties to determine your trustworthiness.
While mobile payment systems cannot help increase your credit score, they can affect your spending habits, which may affect your credit score. Because of this, mobile payment systems are not ready to replace credit cards, yet as the majority of Americans today need good credit scores if they want to be able to purchase valued items, lease cars, or even invest in business.
However, the credit card system cannot rest on its laurels. With only an 18.4 percent adoption rate worldwide, credit cards need to find a way to stay in the game where people are looking for convenience. The advantage that the mobile system has is that people have mobile phones on hand all the time; because of this, there is a larger impetus for digital natives to choose a mobile system for their finances.
Which option do you choose?
There is a trend of banks themselves getting into the digital game. Institutions like Bank of America have been developing their mobile infrastructure with 27 million mobile customers.
As a business owner, what does this trend mean for you? First off, ignoring either of these payment systems could mean that your company may start losing customers. Every generation, including those before millennials, is looking for more convenient ways to make their purchases. Having both options available can open your business to more possibilities to earn. You can cater to the Gen X who still believe in credit cards as well as to the younger generation who may either or both options available to them.
Moreover, as a business, ensuring that you have both options increases your credibility. Having a terminal that accepts credit cards gives your customers the impression that you are a solid company that can easily work with large institutions. On the other hand, having a mobile payment system makes digital natives, who are wary of credit card fraud, feel more secure about their transaction.
What’s important for your business is to listen to your customers so that they can easily and constantly buy from you. Having both systems in your arsenal will make it easier for you to do just that. Mobile payment systems complement credit cards and do provide an alternative option. It may take time before they do replace credit cards but until that time, both services help the public just fine.