For 60 years, credit cards have become the most widely used means of payment worldwide. In recent decades, with the advent of online shopping and the addition of debit cards, plastic payment cards have become indispensable.
Credit card fees cut into the profits of those who accept them
However, there are many players involved in commercial credit card transactions. In addition to the card provider, there is the bank, and other intermediaries who charge a commission for the transaction to take place.
For every $100 a buyer pays, the seller receives $97.25, the rest being commissions. For this reason, China looked for a way to eliminate commissions so that the money reaches the seller in full.
QR replaces credit and debit cards
It is not about virtual use of credit or debit card, but using the smartphone with QR codes. This code system successfully replaces barcodes and is also an excellent means of payment.
The reason is the amount of smartphones circulating, every inhabitant has one or more of them. Therefore, it becomes the best means of payment in supermarkets, shops of all kinds or gas stations among many more.
The means they use in China to make transactions by QR, are companies that provide mobile payment options or We Chat Pay, which is the Chinese WhatsApp. Companies offer this option as a free service for customers who shop sporadically. As purchases increase in their amounts, the commissions go up.
However, the same platforms provide more comprehensive services than their Western sisters. Users can perform a variety of actions on them. In the West, several applications are required to do the same thing.
Each commercial entity has its own unique QR code, the same is true for each individual buyer. Payments for services or commercial transactions are made between users of the system, without bank intervention.
These means of payment raise some concerns
As you might expect, there is a lot of concern among banks and card providers. Especially in the United States, where the business built around plastic money is of great importance.
Merchants do not need a terminal to accept credit card payments. This for the merchant is a substantial savings in services and higher profit by not paying commissions. However, it is a concern for banks and card providers. In addition, there is no circulation of cash.
Also to complete the picture, an economic giant in China launched payment by facial recognition. This leaves even QR behind. There is already a platform that supports this system.
It is called Smile to Pay and the user makes the payment using a template that recognizes his face. Taking this information into account, it can be deduced that the days of credit cards are numbered.