The future of credit cards: A discussion with Toffer Grant of PEX Card
Evolution has disrupted the credit and debit industry in a dramatic way over the last year, with new platforms like Apple Pay taking flight helping to eliminate credit card fraud.
As such, gone are the days of traditional debit and credit cards as the sole payment options for consumers and small businesses looking to transact.
We recently sat down with Toffer Grant of PEX Card, a prepaid expense card created specifically for small and medium enterprises, to talk about these changes, and the future of card transactions.
PEX Card, which is a small business prepaid credit card that debuted in 2009, was launched to help companies streamline employee expense management by displacing expense reimbursement and petty cash. The company is venture backed and headquartered in New York City.
Mr. Grant believes that Apple Pay, in which a fingerprint on phone is necessary for use, is just the tip of the iceberg when it comes to biometric authorized payments. “If a biometric solution can ID and process as quickly as EMV or a swipe, I believe the benefits could outweigh in the future as the need for a physical EMV card would become unnecessary.”
Apple Pay has been making waves since its U.S. launch in October 2014, with 23 banks and credit unions recently added to its roster of partners. The service is designed to enable users with recent iPhone versions (6, 6s, 6 Plus, 6s Plus) to make payments through their phones using an NFC chip built into the phone.
While new methods of payment are making it easier to transact, Mr. Grant doesn’t anticipate traditional debit and credit fading out anytime in the near term due to their long established history.
“These solutions are ingrained in how people transact. It has taken 15 years for a mass reduction in cash and checks to occur. I believe in the next 15 years the concept of debit and credit accounts, and the networks in between will live — just using a different medium, like mobile devices and an uptick in virtual currencies/bitcoin.”
Mr. Grant notes that smaller sized companies still like using live checks for invoice payments, but states that as more business management mobile/web apps and SaaS services are adopted payment for them will increase using card and ACH.
In terms of the existing payment system, he believes there are opportunities in bitcoin, though it’s a market that will take some time to mature. They also lie within niche professional markets.
“Due to regulatory nuances in various fields, I see opportunities to build payment remittance solutions for health care, legal and other professions that have rules for how to store and handle money.”
Overall, it is clear that EMV has it’s place in existing banking infrastructure and will be difficult to displace, but new players are offering innovative ways to transact.
Traditional payment systems can benefit from the evolution of EMV by continuing to leverage partners and create versatility in the user experience. Regardless of the direction the industry takes in 2016, the push toward increased efficiency, reliability and security is sure to continue, and will only work to benefit users.