The Future of Credit Cards: Predictions to Watch

The Future of Credit Cards: Predictions to Watch

Dec 7, 2023

As we approach the year’s end, it’s a crucial time to reflect and anticipate the future of credit cards. In an era marked by rapid technological advancements and shifting consumer preferences, how will credit card usage evolve? More importantly, how will issuers and payment processors adapt to a constantly evolving financial landscape? This blog explores these pivotal questions, offering insights into potential trends and innovations that could reshape our interaction with credit cards.


The Current State of the Industry

The credit card industry has been a vital part of financial transactions for decades, evolving from basic magnetic stripe cards to sophisticated, feature-rich financial tools. And its growth shows no signs of stopping. A 2023 study by the Federal Reserve Bank of San Francisco found that in 2022, credit cards were used to make 31% of all payments. This is the highest level it’s been since the study began in 2016, indicating that credit cards are gaining in popularity as compared to cash or other forms of payment.


This tremendous growth is projected to continue. The Global Credit Card Market size was valued at USD 489.4 billion in 2021 and is poised to grow from USD 521.8 billion in 2022 to USD 961.2 billion by 2030, growing at a CAGR of 7.78% in the forecast period (2023-2030).

However, the market now faces a dual challenge: embracing technological advancements and adapting to changing consumer behaviors. Card issuers must address the growing preference for digital and contactless payment solutions, a trend that has accelerated in recent years.

According to a survey by Mastercard, nearly 80% of respondents globally are using some form of contactless payment, citing safety and cleanliness as key drivers. Approximately 46% of consumers have switched their primary card to one that offers contactless payment, rising to 52% among those under 35. Merchants have responded to consumer preferences. More than 95% of all merchants can now accept contactless payments in the US.


What’s Trending in the Credit Card Industry?

Credit card issuers must be aware of how contactless payments and other factors will affect the future of the industry.


Biometric technology, like fingerprint and facial recognition, is increasingly integrated into credit card systems. For example, Visa piloted a biometric payment card in 2021 that combines fingerprint recognition with a contactless payment card. Since then, a study by Juniper showed that biometric systems have authenticated roughly $332 billion in payments as of 2022 and are predicted to reach $1.2 trillion globally by 2027. And as mobile phone adoption continues to rise, biometric payment methods could potentially render physical cards obsolete.


Tokenization is a process where sensitive credit card data, like the card number, is replaced with a unique identifier, known as a token. This token is used in transactions instead of the actual card details. The real card information is stored securely in a token vault, and only the token is transmitted during payment processing. Services like Apple Pay and Google Pay are adopting this technology, adding a layer of security to digital transactions.

Tokenization is increasingly becoming a significant trend in the credit card industry due to its enhanced security features and its ability to safeguard sensitive cardholder information. It also helps businesses comply with PCI DSS by minimizing the amount of cardholder data they need to manage. Looking ahead, we can expect tokenization to become a standard in the credit card industry. Its role might expand beyond just payment processing to other areas where sensitive data needs to be secured. Additionally, advancements in technology may lead to more sophisticated tokenization techniques, further enhancing payment security.

Buy-Now, Pay-Later (BNPL)

BNPL services have revolutionized consumer credit, offering flexible payment options. ‘Buy now, pay later’ services will see increased consumer interest and more banks are expected to offer these services. These options allow consumers to create payment plans without the high interest rates typically associated with credit card APRs.

The BNPL model is emerging as a formidable alternative to traditional credit, with options often including interest-free periods.  The Motley Fool found that 62% of BNPL users think it could replace their credit cards. According to a report by Worldpay from FIS, by 2024, the BNPL market is expected to grow by 181% and will account for 13% of all global e-commerce payments. This rapid growth challenges traditional credit card companies to innovate and potentially integrate similar offerings. However, it is important to note that BNPL has been facing increasing scrutiny by governments and the sector is expected to be more highly regulated in the future.

Person-to-Person Transactions

P2P payment platforms like Venmo and Zelle are gaining traction, facilitating direct transactions between individuals. P2P spending is a common way to split checks, repay friends, or purchase goods and services, things millions of people do every day in lieu of paying with cash or a credit card. According to Forbes, total P2P transactions are expected to reach $1.4 trillion in 2023, a 28.5% increase from 2022, a further increase to nearly $2.3 trillion annually by 2026. Credit card companies might need to forge partnerships or develop integrated solutions to remain relevant in this space.

Virtual Credit Cards for B2B

Virtual credit cards are a significant advancement in payment security and flexibility for B2B companies. A form of masked cards, they allow users to make payments without sharing actual company credit card information, significantly reducing fraud risks.  For example, solutions like Mesh Payments streamline B2B transactions by offering customizable virtual card solutions.

This type of protection is becoming even more essential in a world where “card not present” (CNP) fraud is occurring more than ever. As these masked virtual cards become more popular, they can potentially disrupt the credit card industry.

Shift from Plastic

New data is indicating a shift away from traditional plastic cards. With 30 million kg of PVC going into bank card manufacturing every year, eco-friendly issuers are stepping up to do their part.  Mastercard announced that, starting in 2028, it will be requiring all banks issuing its payment cards to use sustainable materials. Those payment cards will still be made of plastic, but they will be made out of recycled or bio-sourced plastics (made from biomass materials, such as vegetable oil, corn starch, or sawdust). For example, Thales has introduced a card made from polylactic acid (PLA), a sustainable plastic substitute made from non-food corn, that removes more than 80% pf PVC from the card.

This is a big deal, as around six billion new Mastercard are produced each year. Since the company introduced an optional program in 2018 that began to study alternatives to PVC plastic cards, 170 million cards have been made out of recycled or bio-sourced materials. The rest will follow within the next five years.


In conclusion, the credit card industry stands at a crossroads, with technology and consumer preference being a primary driver of change. Key trends to watch include advancements in security technologies, the rise of alternative payment models like BNPL and P2P, and the shift towards virtual and contactless payments. To remain vital in the global financial ecosystem, the industry must evolve and embrace these changes.