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TheStreet Open House

Why Your Credit Card Will Soon Be Useless

NEW YORK (TheStreet) -- Just as the use of paper-based currency and coins drops dramatically -- by some accounts to just 23% of all transactions by 2017 -- it looks like credit and debit cards are on the way out too.

A report from the Germany-based Smart Payment Association says the use of so-called "contactless payments" is rising significantly, including in the U.S.

"Whether in the form of a 'tap-and-go' credit or debit card, or contactless payments via a smartphone, growing consumer and retailer desire for the convenience and opportunities presented by contactless payment accounts for this rapid growth," the group says.

For how long will contactless technologies need actual payment cards? The SPA isn't sure, but it says use of mobile phones for contactless payments is on the rise.

"The migration to contactless payment is a reality in more than 30 countries worldwide. The deployment of contact payment infrastructures, which includes terminals and point of sale, is paving the way for mobile payments and accelerating the introduction of NFC to mass markets," the report says, referring to near-field communications, a wireless technology that enables data to be exchanged between devices held near each other.

In other words, we're transitioning to a new consumer payment technology right on top of another transition.

"The data from this report reveals a growing desire by consumers for the convenience and immediacy of contactless payment, and issuers are responding with innovative payment options, including those with transit features that put them 'top of wallet,'" says Sylvie Gibert, president of the Smart Payment Association. "The acceleration of contactless payments is, in turn, fueling demand for mobile payments via NFC, which in itself represents a major mass market transition."

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