August 8th, 2017

For me it started at the end of June when  Triodos´German arm rolled out a credit card based on the biodegradable plastic PLA (based on corn starch). So I wrote a short note at the end of July. After I learned that this way we end up with chips and magnet stripes without plastics I became keen on learning more about payments and it’s future. And indeed, we might well end up with lot less plastics as well as no waste on chips and magnet stripes.

Dr. Ralf Breuer

The physical dimenson of cards

Triodos‘ advertised with some 130m bank and credit cards circulating in Germany covering a stretch of 11,000km (6,835 miles) from the North Cape to Capetown. Visa alone has more than 3bn cards in issue, 690m new ones in BY2016. Setting aside the share of virtual cards all cards circulation would cover about 5 squaremiles. All that at a growth rate close to 30% p.a. – Fortunately not to be extrapolated given the strong growth and increasing penetration in developing and emerging countries.

Growth is in QR land

Since the mid of July 2017 a global standard for using QR in payments was established. QR is the major technology in China and much more adequate for developing and emerging countries as it requires far less infrastructure. Thus logical to see Visa rolling out QR-based mVisa into 10 countries of the developing/emerging world (India, Kenya, Rwanda, Egypt, Ghana, Indonesia, Kazakhstan, Nigeria, Pakistan and Vietnam). Logical for Visa to list virtual cards and cheaper/faster POS as major means for expansion on it’s investor day 2017.

Are we stuck with plastic cards?

Appears that the mature markets are experiencing some sort of frogleaping as the developing world is building on far newer technology. But as we would still like to welcome Chinese purchasing power we have to adopt at least at the most relevant point-of-sale. As solutions like mVisa can be based on smartphones and tablets this appears far easier at the second glance. Thus clear no?

Legacy infrastructure can slow, not block

To a certain extent we might be stuck with our existing infrastructure, but technology increases pace with other parts of the world frogleaping. Pressure to catch up might strongly increase.

In the meantime we might chase different ideas such as reducing the number of cards in our wallets. There already had been some hardware solutions brought to the market trying to bring several cards on a single tool, without visable success. This may be different with the latest one: Curve claims to save cards by integrating all Mastercards in one card. Thus, it may be convenient for those holding several Mastercards. This not solves the underlying problem, but it points into the right direction.

If we could switch to electronic/virtual issuance only adding the cards to one tool we would already end up with far fewer physical cards without being obliged to immediately dispose all our cardreaders, ATMs etc.

Anyway, reducing the number of cards implies stopping over, not arriving. With the strong growth ahead cutting back all kind of cards and esp. those bearing chips and magnet stripes would imply a substantial contribution to the world’s sustainable development goals (SDGs) as well. #Fintech are usually not seen in that context.