Voice of the Industry

The rise of digital wallets and disappearance of plastic cards

Tuesday 2 November 2021 05:05 CET | Editor: Alin Popa | Voice of the industry

Is the plastic card on the way out? What payment methods will proliferate in the coming years? Isabelle Isil Ugurlu from elumeo has the answers

As COVID-19 maintains its grip and continues to influence consumer behaviour, the uptake of non-plastic payment methods is rising. But does this spell the end of the plastic credit-card era?

From the first Diners Club credit card unveiled in 1950 to now, a lot of time has passed and much has changed. Recent technological developments and consumer preferences in-store could suggest times are changing.

For some years now, predictions suggest that plastic credit cards or any other means of physical payment methods will not be around much longer. On the other hand, speculations about how much longer we will be carrying cash in our pockets have always been a popular discussion among financial experts. Various founders of financial institutions, as well as industry experts, used to base their predictions about the future of payments on the light-speed growth of digital payments.

Pandemic impact on digitalisation

While digitalisation unquestionably plays a key role in the rise of digital alternatives, recent global developments as a result of the COVID-19 pandemic have shown us a different array of possibilities for rapid behavioural shifts amongst consumers. At the beginning of the global pandemic, many governments took measures to protect their citizens, leading to lockdowns of varying degrees. The immediate consequence was, of course, a steep reduction in expenses along with cash usage. The fear of contracting coronavirus through high-traffic ATMs and, in some cases, the refusal of merchants to accept cash can only be seen as a great addition to an already declared war on cash.

The fear of getting infected and the urgency to spend a minimum time in stores in order to avoid interactions at the cashier led consumers towards digital solutions. Considering the fact that, especially in mature and emerging markets, the tendency for digital wallets is rising for both in-store and online purchases, the immediate digital adoption is less surprising. During the crisis, as a result of a quick shift in consumer payment behaviour, the capacity to pay by contactless card has proven wildly popular during the pandemic. New data from Visa shows contactless cards were used in 73% of all card transactions worldwide in the last year.

And technologies that qualify as replacements for plastics cards already exist. Furthermore, options like QR codes, NFC, and temporary PINs have been around for a while but true uptake and market breakthrough seem to only have happened on a global scale since the beginning of the pandemic. In fact, according to statistics, 86% of first-time contactless adapters see themselves likely to proceed with contactless payments from now on. This trend may mean as well for cash as for plastics credit card a soon end.

Predictions and outcomes

Mobile wallet demand had been on the rise before the pandemic. Countries like France, Italy, and Germany had almost 150 million smartphone users in 2019 alone. And by 2025, it is even being reported that 80% of the transactions will be done via internet-backed devices. By then, it is expected that e-wallets are going to be the second, most preferred payment method after cards and the most preferred method among Millennials.

The predictions made before the pandemic may need to be adjusted since COVID-19 and the extreme measures taken have allowed changes to happen which might, under normal circumstances, have taken years to take hold.

So, are smartphones set to make credit cards obsolete? Or will there be a comeback for our beloved plastic spending power?

Survey results pre-pandemic suggested many people were not ready to abandon their beautiful leather wallets. In order to ascertain whether this becomes reality, we will need to keep consumer behavioural trends, as well as rapid digital growth in payment technologies, closely on our radar.

When things, if ever, return to normality, a consumer-driven, slightly different checkout journey might just be awaiting us.

I would put my money on days spent free off plastic cards, scanning watches instead of inserting chips and presenting QR codes at a self-checkout instead of queuing behind the masses. But then again, I am a Millennial.

This article is part of the Payment Methods Report 2021 – Latest Trends in Payment Preferences, a comprehensive overview of the payment methods in scope for 2021, as well as best practices for checkout optimisation and customer conversion by addressing digital transformation, security, and localisation. 

About Isabelle Isil Ugurlu

Isabelle Isil Ugurlu is currently working as Head of Payment at elumeo SE and has also taken over an additional role at the group and become Money Laundering Reporting Officer in 2019. She is also an active part of EWPN (European Women Payment Network) since 2018 to foster network’s presence in the German fintech industry. She is initiating partnerships with leading organisations and holds Meetups, which cover not only hot industry topics but also focus on important matters like diversity.


About elumeo

elumeo is a leading European company specialising in the production and sale of a wide range of gemstone jewelry. Founded in 2008, it combines the tradition of age-old handcraft with the cost benefits of electronic sales channels.

About EWPN

EWPN is a not-for-profit organisation dedicated to building a community for women in cards, fintech and payments in Europe. As the first and only Pan-European community for women, EWPN strives to create more opportunities for women and minorities, as well as being a champion for a more diverse and inclusive industry for all. EWPN does this by organising local networking evenings, workshops, annual events, awards, and research, which all are welcome to be involved in.


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Keywords: digital wallet, debit card, digitalisation, COVID-19
Categories: Payments & Commerce | Cards
Countries: World
This article is part of category

Payments & Commerce