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  • Written by EQS Asia Business News

EQS-News / 11/01/2016 / 12:16 UTC+8

HOW LONG WILL PLASTIC CARDS REALLY BE AROUND? Al Vrancart - ICMA Founder Emeritus and Industry Advisor

I am often asked the question "how long will plastic cards be around." While this is a complicated question my answer is always for the near future. Given that you all know my answer to this question, I became curious as to what your answer would be. At the 2015 ICMA EXPO this past March I asked the audience of approximately 300 card industry stakeholders to vote on whether they thought the plastic card industry would be around for more than 10 years, only five to 10 years longer or less than five years. The results were as follows:More than 10 Years: 49%From 5 to 10 Years: 39%Less than 5 Years: 12%

In reviewing these results I was delighted to see that half of the attendees at the EXPO were of the same mindset as myself, believing that plastic cards will be around for more than ten years. During my recent "2014-2018 Global Card Industry Market Statistics & 5 Year Forecast" presentation at the EXPO, I expounded upon the reasons why the plastic card will be around for many, many more years. One of the most important points I made during that presentation was that there is a costly global infrastructure and standards in place for plastic cards that works extremely well. We, the industry, continue to invest in that infrastructure as well as in the global conversion to smart chip cards and have spent the last 50 years perfecting it! I also that while there are several potential disruptive technologies that are competing with each other, there is no clear winner. However, it does appear that a new "tech bubble" has been created.

Another reason for the longevity of plastic cards is that smart chip cards have not yet saturated critical geographic and vertical markets. Smart cards are the preferred platform for launching most new transaction and verification technologies and are the cornerstone for the future of payments security. Smart cards also have a default to magnetic technology that ensures a transaction is captured. I also find that the adoption of new technology is segmented by generational demographics, that consumers resist change and that old habits are difficult to change. We have been swiping and tapping plastic cards for many years and consumers find it easy and convenient! When it comes to the cost of new technologies as opposed to cards, plastic cards are less expensive than any of the alternative technologies. This cost savings continues to support the plastic card and its lifespan. Plastic cards are also the entry or recognition device to access or open a sophisticated secure software system.

Additionally, a physical card and supportive packaging is preferred by many consumers for gift giving as opposed to an email, text message or on-line prepaid account which is helping to increase the survival of the plastic card. Printed plastic cards also better portray a brand or image. I also find that "top of wallet" is more prevalent with plastic cards. When it comes to mobile technology, most smartphone "apps" need and desire a companion plastic card and in many cases plastic cards can transact faster than a smartphone app. In looking at generational differences, not everyone has a smartphone and their monthly plans tend to be expensive. Smartphones, which initially require a plastic mobile SIM card to become operational, are battery operated and can be stolen, lost, lose power or break and consequently they need a default companion plastic card. Lastly, what is important to remember is that "CASH is KING" with 46 percent to 82 percent of payment transactions still done in cash depending on the country. Plastic cards and new technologies will co-exist for the foreseeable future. Plastic cards have a long good-bye ahead of them!

About the Author: Al Vrancart is Founder Emeritus and Industry Advisor of ICMA. With more than 30 years of business experience, Vrancart initially co-founded ICMA in 1990. Previously serving as president/CEO of NBS and Qualteq, his guidance and counsel has helped ICMA and other industry associations and stakeholders implement growth initiatives effectively and successfully. Al is a frequent presenter/speaker at card manufacturing industry events. He is particularly focused on Global and Regional Industry market statistics, forecasts and metrics.

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Authors: EQS Asia Business News

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