The Future of Electronic Payments: Where Do We Go From Here?

The ability to make electronic payments creates an efficient exchange of goods and services, which will help the recovery of global economies this year and beyond.


Do you own a Blackberry or an iPhone? How many times a day do you look at it? Would you panic if it suddenly stopped working?

Our grandparents spent years, even decades, adjusting to the cultural impacts of new technologies like the radio or television. Today, we simply adopt them and move on, taking them for granted.

We take for granted that complex, life-changing innovations will simply be there, without considering what it would mean if they were suddenly gone. And sometimes we forget using them responsibly is crucial to the value they deliver.

On average, there are more than two cars for every U.S. household. Americans can’t imagine living without them, and yet auto accidents are our country’s top cause of accidental death. Rather than reintroducing the horse and buggy, which is frankly a safer way to travel, automakers differentiate themselves by introducing new ways to make their vehicles safer and provide drivers with more control. Innovations such as air bags and anti-lock brakes have become standard.

No one questions how much easier the vehicle makes people’s lives, but consumers will hold automakers responsible if the fast, efficient transportation they are expected to provide is not trustworthy. Just ask Toyota.

Today, the electronic payments industry is in the same situation. The debate over whether to use cards or other forms of electronic payments is no longer relevant. It’s like debating whether to take the Honda or the horse and buggy to the supermarket. Consumers have spoken. Businesses have spoken. Governments have spoken. The benefits of paying electronically are undeniable.

This is good for everyone, because our products are going to play a significant role in the recovery of global economies this year and beyond. The incredible value of our products has become so widely accepted that it is often taken for granted. MasterCard likes to say we are “at the heart of commerce.” What we mean is electronic payments, the business we are all in together, create an efficient exchange of goods and services. And, importantly, in many cases this exchange would not otherwise exist. People can buy what they need when they have access to the money in their accounts or lines of credit, without being limited to the cash they have on hand. Creating and helping to fuel an incremental exchange of goods and services is key to economic growth.

However, the economic recession has brought with it a change in consumer attitudes toward spending that is shifting the perception and use of payment products. As I mentioned, consumers will continue to use electronic payments more and cash less because it makes their lives easier. They will do so, however, with a renewed appreciation for electronic payments as valuable financial management tools rather than as a way to access things that would otherwise be unaffordable. On the surface, this might seem a bit frightening to our industry, but let me assure you it is a good thing. The key for all of us is to recognize this as an opportunity and not as a threat.

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