Smart cards use an integrated chip to make credit and debit transactions more secure. But these days, just about everyone already has a smart card in their wallet.
Consumers are constantly chasing the next big thing. They’re looking not just for a sleeker, shinier card, but one that actually brings new value to their financial lives.
Rest assured smart card issuers are racing to develop those sort of features. So what can you expect? Some of these features might be wishful thinking now, but don’t be surprised if they come to your card in the next few years:
Do you have problems with impulse buying? Forgetting to reserve some of your income for savings?
Many credit cards already offer budgeting software. Some debit cards come with a feature that round ups purchases to the next dollar and deposits spare change into a linked savings account. Next-generation programs are around the corner.
Imagine a card that can suggest spending goals based on your monthly income. If you exceed what’s recommended in a category, you might get an SMS alert warning you about the overage.
Or, perhaps you want to spend a certain amount of your holiday budget at local retailers. Maybe your next card will be able to break down your spend by each merchant’s geographic location.
When it comes to your money, nothing is more important than security. Between card skimmers and online scams, there are dozens of different ways your card could be compromised.
Most financial institutions do a great job of safeguarding your card. But remote monitoring can’t prevent every real-world security incident. This is where next-level security features come into play.
Imagine a debit card that only unlocks when you scan it with your fingerprint or type in a PIN on the face of it. Not only would this be a cool party trick, but it would stop anyone other than you from using your card.
Many card issuers are already part of the way there with card on-off switches. These allow you to disable your card in its associated app if it’s lost or stolen. They aren’t foolproof, but they are a lot better than waiting on hold for an hour to tell a customer service representative to cancel your card.
What about digital security? Constantly changing security codes already exist. The idea behind these is that the digits on your card are only valid for a short period of time. If they’re entered after that window closes, the transaction is declined.
A more secure solution would be for all card numbers to change periodically. Guessing three digits correctly is a lot easier than doing so for more than a dozen.
The average consumer has four credit cards. Add debit cards, gift cards, and membership cards to that list, and you have yourself a wallet that barely fits in your pocket. Tomorrow’s smart cards will hold all of your payment options in a single card.
Digital wallets can already do this to an extent. However, digital wallets aren’t widely accepted out of major cities. A smart card could make the concept compatible with the card readers every merchant has.
Chances are, a universal physical card would require a touch screen. Making it thin and unbreakable will be a challenge, but flexible phone screens suggest it might not be that far off. Google’s foldable Pixel phone is due to be released in the U.S. in late 2021.
On top of other financial cards, smart cards may soon function as identification cards. From company badges to driver’s licenses to passports, your next card could be a chameleon. Even your bus pass or airline tickets could be attached directly to your card.
The downside of this smart card feature is security. If your credit card can double as your passport, it’ll be a lot more valuable to thieves. Strong authentication tools, including changing card numbers and biometric access controls, will be necessary for these types of cards.
In a sense, this is the true definition of a smart card. A card that can be swiped for anything and anywhere is the holy grail.
Buyer and Seller Feedback
Swipe your smart card and transaction information travels from the point of sale to the merchant’s own bank. In the future, smart cards could deliver a lot of other details to sellers.
Say you buy an ugly Christmas sweater online. If the transaction could be more secure — say, through HTTPS — your transaction data might arrive with a suggestion to upgrade the retailer’s site. If the purchase has to be refunded because an item is out of stock, perhaps the card issuer asks the merchant to remove that product from their site until it’s back in stock.
Similar feedback could be delivered to buyers. If you swipe your smart card on a discounted item, perhaps your digital receipt displays similar discounts on other sites. Or if you buy a pizza, maybe it signs you up automatically for the pizza place’s rewards program. Wouldn’t it be nice if your card could spot opportunities for you to save money?
This is the least likely of any smart card development, but that isn’t to say it will never happen. There may come a day when consumers are able to make purchases with a flick of their wrist. Not only would that be incredibly convenient, but it would make card theft incredibly difficult.
To be sure, this smart card innovation has drawbacks. The medical process could be invasive and expensive. Some users may worry that chip implantation is a ploy by a government to track citizens’ every move.
Smart cards are already incredible pieces of technology. As the digital age progresses, they’re only going to become more capable. The challenge is, and always has been, keeping users’ financial data safe while delivering convenience.
Can financial institutions pull it off? Well, it wasn’t until 1992 that the first chip card was introduced. In another few decades, smart card improvements will be nothing short of stunning.