The Future Card

Spoiler: It may not always be a piece of plastic or metal you dip or tap.

More than 25 years ago, the U.S. automotive industry made its first notable move to hybrid-powered cars with the debut of the 2001 Toyota Prius. Now, the payments industry, specifically, the card segment, is well under way with its own hybrid adaptation of credit and debit cards for a digital world.

One of the first hybrid credit cards, the Apple Card issued by Goldman Sachs, debuted six years ago. Today, many issuers offer a strong digital component, with many able to issue a digital version to a mobile wallet prior to the arrival of the physical card in the mail.

This digital shift is changing the perception and use of cards, but it’s not going to cause their demise. Instead, it may cement the card’s position even more as a payment option, just with digital offshoots.

Evidence of this change is abundant beyond the Apple Card. One study, conducted by ABI Research for the NFC Forum trade group, found that in 2024 95% of respondents left their physical wallets at home in favor of a mobile wallet. Perhaps influenced by the gigantic increase in the adoption of contactless payments during the Covid-19 pandemic, consumers are much more accustomed to tapping to pay, something done equally easy with a credit or debit card or a smart phone.

Then there’s the proliferation of smart phones, the ones that usually come with a mobile wallet. As of 2024, 91% of U.S. consumers own a smart phone, says the Pew Research Center. There’s also the declining use of cash, which in 2014 accounted for 44% of global POS transaction value, according to the Worldpay Global Payments Report 2025. It decreased to 15% in 2024 and is forecasted to drop to 11% by 2030.

It’s not just consumer payments patterns that are changing. Merchants, too, are adopting technology to align with how consumers prefer to pay. SoftPOS—using consumer-level devices with payment-specific apps and software—is gaining ground.

“As digital and mobile wallet adoption continues to grow, the role of physical credit and debit cards is also evolving—but not disappearing. Rather than becoming obsolete, physical cards are transforming to better align with changing consumer needs and emerging technologies,” says Matthew Robinson, executive vice president of network and acquirer solutions at American Express Co.

‘Emotional Touchpoints’ Cards themselves are beginning to change.

Mastercard Inc. has made the magnetic stripe optional on newly issued credit and debit cards, with a plan to eliminate it from its cards by 2033. The security and authentication once provided by the data contained in the stripe has been surpassed by EMV chip technology and improved authentication tools. Tokenization of card data has helped, too. Network tokenization launched in 2014 and has transformed payments beyond the initial use case for tokens in mobile wallets.

The digital version of a credit or debit card will complement the physical card and vice versa, many observers say.

“At the same time, for many consumers, physical cards may still represent a reliable and widely accepted payment method, especially in places where digital infrastructure might lag or for certain use cases, such as ATMs,” says AmEx’s Robinson. “For certain types of transactions—such as travel, high-end retail, or luxury services—the transaction is often linked to the broader customer experience and human interaction plays a key role. In these scenarios, digital payments may not replicate the emotional or experiential touchpoints that customers value and expect.”

Cards remain an important element in commerce. While cards one day may not be in use, that is a faraway possibility. (Most U.S. consumers have an average of 3.9 cards, according to credit reporting agency Experian.)

Indeed, in a closer time frame, say over the next 10 to 20 years, cards are unlikely to go away, says Tony DeSanctis, senior director at Cornerstone Advisors’ payments practice. “Longer term, it is possible, but the likelihood is low that cards will be completely replaced,” DeSanctis says.

Card manufacturers, too, are keenly aware of these trends.

“The way our clients see it is as a complement, the card and something else,” Peggy O’Leary, executive vice president of prepaid and digital solutions at cardmaker CPI Card Group Inc., says of digital wallets and their electronic versions of payment cards. Littleton, Colo.-based CPI launched its push provisioning for digital wallets in 2022 to Apple Pay, Google Pay, Samsung Pay, and click-to-pay mobile wallets.

It’s a similar take at Giesecke+Devrient, a Munich-based card and chip maker. “Physical cards will likely remain relevant for years to come, especially as a reliable alternative when digital payments aren’t accepted or connectivity is limited,” says Mark Van Horn, digital solutions lead in North America for Giesecke+Devrient. “The concept of ‘phygital’—blending physical and digital experiences—continues to influence how financial institutions approach card programs.”

And while issuers want to provide cardholders with digital options, physical cards still have a role for banks and credit unions, Van Horn says. “Physical cards also retain importance as recognizable brand assets and tangible tools for customer engagement,” he says.

Winning Top of Wallet

In the non-digital days of payment cards, top of the wallet was a critical goal for issuers, entailing multiple marketing messages and incentives to get a cardholder to prefer one card over others so that card was the first visible card in a wallet. While top of the wallet remains the objective, what it means and how it’s accomplished are changing.

“In some segments of the market, particularly among digitally native users, digital-only payment credentials are already becoming the norm,” Van Horn says. “However, digital exclusivity isn’t likely to be universal in the near term due to varying infrastructure, consumer preferences, and the continued utility of physical cards.”

At CPI, O’Leary sees multiple aspects to this. “One is about speed to wallet,” she says. When physical cards dominated, the process was about speed to the consumer. Yet, that remains critical in the digital age. Some issuers will provision a digital version of the card, much like Apple did when it launched its Apple Card in 2019. It was digital first, offering 3% cash back on purchases made with the digital version compared with 1% cash back on transactions made with the titanium Apple Card.

O’Leary says CPI has learned along the way that top-of-wallet status is just as important digitally. “Just because you’re the preferred card in a wallet doesn’t mean you’re capturing all the spend when someone is paying digitally,” she says. Push provisioning can be helpful in this because it not only shows innovation, but it presents an opportunity to make sure the consumer can spend from that account more quickly, O’Leary says.

At issuing platform Galileo Financial Technologies, a company owned by SoFi Technologies Inc., top of the wallet means onscreen.

“The competition has moved from the physical wallet to the phone screen. Winning ‘top of wallet’ today depends on seamless digital setup, instant card updates, and ensuring your card remains the default, even if it’s replaced,” says Prashant Shah, Galileo vice president of product management.

The just-introduced Galileo Payment Method Switch enables clients to embed this service into their apps, letting customers update their payment method in seconds and helping issuers boost the visibility of their payment products, Shah says.

Others have similar services, chief among them are the Mastercard One and Visa Flexible credentials. These payment services enable consumers to switch their preferred digital payment method within an app. Mastercard launched its program in February and Visa in 2024.

These tools give further agency to what consumers already are doing, says David Shipper, strategic advisor at Datos Insights. “Our research shows that consumers are already switching between debit and credit based on the dollar amount of the transaction or merchant type, so these tools will make the mobile wallet more convenient and help consumers better manage their finances,” Shipper says.

As Galileo’s Shah says, “Visa’s Flexible Credential and Mastercard’s One Credential herald a future where a single credential can pull from debit, credit, or BNPL in real time—whichever best fits the moment. Because network partners are already updating token-management rails in the background, issuers won’t need a massive overhaul to adopt the model once it’s live.”

“The real shift,” Shah adds, “will be on the consumer side: instead of choosing a card at checkout, the customer can preset the funding logic, and watch it seamlessly execute during the transaction, which raises the bar on rewards engines, risk models, and UX transparency.”

The Age Factor

That day may be yet to arrive, but as Shah and others see it, it’s coming soon.

“In a traditional physical shopping environment, the payment method used most often was the one that was easiest to grab, which has lent itself well to cash and physical cards,” says Tony Allen, chief technology officer at Recurly, a subscription-management platform.

“But online and with the proliferation of contactless payments,” he continues, “competition is more nuanced. Alternative payment methods like BNPL, peer-to-peer payments, and digital wallets have made it incredibly easy for consumers to have their choice of payments based on which one offers the most value through rewards, personalization, and other perks—and issuers, brands, and merchants want to be a central part of consumers’ decision-making process.”

Both Mastercard One and Visa Flexible Credential are tools designed to empower consumers to make their own payment choices. As younger consumers come into their prime earning and spending years, payment methods will adapt. For example, GenZ, those born between 1997 and 2012, embrace digital wallets and like having payment choice.

As Shipper says, age is an important factor when considering the future of card payments. “Age is the largest factor since younger consumers are more digitally savvy than older consumers. One could also argue a difference based on income since lower-income consumers may not have a smart phone that supports mobile wallets, or may be more likely to shop at a store that does not support contactless payments, such as Walmart,” he says.

A Terminal Habit

Credit and debit card issuers need to remain alert to shifting consumer preferences, says Randy Piatt, vice president and head of product for digital card solutions at Fiserv Inc.

“One of the most critical factors influencing merchants’ interest in digital wallets is the need to stay relevant with an evolving consumer base. With the high adoption rates of digital wallets, particularly among Millennials and Gen Z, retailers that embrace these technologies can better cultivate loyalty and engagement with these influential demographics,” Piatt says.

Getting merchants onto the digital-wallet acceptance path could get easier as more consumers choose to pay with a digital wallet. As Piatt says, there are many benefits to digital-wallet acceptance, ranging from improved security, a quicker checkout online and in-store, and the potential to reduce abandoned shopping carts, an irksome issue for online merchants.

“However, despite the advantages, many merchants remain hesitant to adopt digital wallets,” says Piatt. “A common barrier is the perceived need for significant investment to upgrade or replace existing point-of-sale (POS) systems, creating a roadblock to implementing these innovative solutions.” One factor that should help is that mobile wallets at the point of sale use the same NFC technology that contactless cards rely on.

A physical card and its digital counterpart will coexist for many, many years. As consumers today live in a commerce world with more payment choices than ever, they will use whatever is convenient, however they may define that.

“Physical credit and debit cards aren’t necessary for online or mobile transactions, as tokens allow consumers to pay with stored data,” says Anthony Walsh, head of retail sales in the United States for point-of-sale terminal maker Ingenico. “However, with the majority of retail sales still occurring in physical stores, physical cards remain relevant. Inserting or tapping a card on a payment terminal is a habit for many consumers.”

Still, Walsh adds: “Although paying with a physical card is prevalent now, digital wallets eventually may become the most popular payment choice among consumers, with physical cards as a secondary choice. Changes in consumer behaviors are always dependent on the payment technology that’s available and the perceived value, like time savings or convenience, of using it.”