NEW YORK (MainStreet) — We seem to like, if not love, our debit cards.
According to the Federal Reserve, there were 283 million debit cards in use in the U.S. last year, with an average 23 payments per month.
But analysts speculate that debit cards have an expiration date of their own, possibly becoming obsolete within a few years (along with credit cards).
The blame goes to mobile payments, which are growing in use at an impressive pace. The research firm Gartner says mobile payments accounted for $235 billion in 2013, but that figure is expected to rise to $720 billion annually by 2017.
"It won't happen overnight, but mobile payment platforms like Apple Pay will eventually take the place of debit cards," says Sean Graw, spokesperson for BradsDeals.com, a consumer deals site.
Data safety is the big reason, but convenience plays a role too, Graw says. "Since mobile payments are encrypted, your card and account numbers are safer. They also reduce the need to carry around a wallet full of cards," he says.
Consumers can expect debit cards to be around for a few years before they go the way of the hula-hoop and phone booth and are replaced by mobile chip technology. "Debit cards are here to stay for at least another three to five years, in which time they will be replaced by SIM card mobile technology," says Jim Angleton, president of AegisFS, a wholesale financial payments services company. "Chip-and-PIN technology is finally taking hold in the U.S., taking the place of the archaic older card-based payment system that has experienced cyber attacks, loss and theft of funds."