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Is mobile payment always meant to be credit card payment?

When you think about mobile payment, credit card payment may come to your mind almost instantly. However, most people don’t carry credit cards in China,  but they do use mobile payments in their everyday life via Alipay and WeChat Pay (which doesn’t require credit card details).

Credit card is convenient to use for paying online and offline.

If you think back about the innovation of credit cards, the original purpose seems to be targeting at people who want the convenience of paying things without bringing too much cash in their wallets.  And when people start to use internet more often, it becomes natural for people to use credit cards since it is impossible to pay in cash.

Credit card companies increase the Internet usage by investing in security.

When credit card companies saw the increasing usage on the Internet (and also increasing credit card fraud cases), they saw a need to provide more security for credit card payments online.  The most recent protection method of using mobile phones to verify with one-time-password helps to make more security sense.

Credit card is actually causing a lot of distress to people who mismanage their money.

But if we think back again about how credit cards are started, it is still a buy-first-pay-later mode which seems to have caused a lot of distress to people who mismanaged their money. Hence, debit cards are also invented to target a different group of people but the perks are much lesser.

Who should pay for the credit card payment usage? Merchant or customer?

Credit cards are also putting a pretty high fee on the merchants. Hence, merchants who don’t have high profit margins will not be able to provide such a service too. If they do, they may even put a charge to their customers instead which comes a barrier to deter more transactions to be made.

Is credit card really necessary today?

If we look back at the original intention of credit card, it is to have a middleman to pay for you first while you pay back later.  All for the convenience of payment when technology was not advanced enough; Most people were not holding a mobile phone back then, while carrying a wallet is a common thing to do.

In the near future, all you need to do is to be able to provide an easy way for users to pay with mobile phone from either the merchant’s or the customers’.  In fact, credit card is no longer necessary (unless you are intending to owe them money with high interest rates to pay every month).

One day, somebody is going to create a common Web Service for the world to use as their mobile payment mode,  and instantly the credit card companies may just get out of business. I believe credit card companies (such as VISA, MasterCard, American Express and Discover) might want to start thinking about this space so as to stay relevant.

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