Will Mobile Payments Crush Visa Inc and MasterCard Inc

The Motley Fool's Matt Koppenheffer interviews Jason Oxman about alternative payments.

May 20, 2014 at 7:00AM

At least once a week, I pay for something with my mobile phone. Usually it's dinner. I pull up an app from LevelUp, hold the QR code up, and, just like that, the transaction is done, without my credit card ever leaving my wallet.

Over the long term, what does that mean for credit card giants Visa (NYSE:V) and MasterCard (NYSE:MA)? Sure, my LevelUp app is connected to a credit card today, but will that always be the case? 

During an interview at payment technologies conference Transact 14, I put this question to Jason Oxman, the CEO of the Electronic Transactions Association. In the video below, Oxman weighs in on whether he thinks the credit card industry is being threatened by the rise of mobile payments.

A transcript follows the video.

Your credit card may soon be completely worthless
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days. Click here to watch this stunning video.

Matt Koppenheffer: Hey, folks, Matt Koppenheffer here. I'm here with Jason Oxman, the head of Electronic Transactions Association. We're here this week at the ETA Transact 2014 conference. Jason, we've just been hearing so much interesting stuff from all these great speakers and panelists so far.

Let me start you off with what I think is a tough one, but a very interesting question to me; Credit cards versus alternative payments. When we think about the future of payment technology, how do you see that shaking out? Is there a partnership, or does one win out over the other?

Jason Oxman: The great thing, Matt, about the industry is that we are in a period of unbelievable innovation. When we talk about the "credit card industry," it has the word "card" in it because, for the last 40 years, consumers have been using the plastic card.

But we're in a period of innovation where we're moving to mobile payments, we're moving to more interesting and dynamic form factors for initiating a payments transaction.

But whatever the means that a consumer uses to initiate that transaction, whether it's the plastic card or the phone, what's most important for consumers and for merchants is the transaction be safe, reliable, secure. All of that goes into the confidence the consumers have in the U.S. to using those "cards," as it were.

Consumers in the U.S. carry one billion credit and debit cards in their wallets.

Koppenheffer: Not all at once!

Oxman: Not all at once, right.

Our industry processed $4.9 trillion worth of transactions last year, so clearly this is American consumers' preferred way to pay.

Koppenheffer: That's U.S., or globally?

Oxman: That's U.S. -- $4.9 trillion in the U.S.

There are 8 million merchants in the U.S. that accept credit and debit cards -- again, because it's consumers' preferred method of payment. So, when I hear people talk about alternative payments -- bitcoin, dogecoin, whatever is out there -- those are all very interesting currencies, if you will, and it's very easy for people to use those alternative forms of payment.

But they don't replace, necessarily, what we're used to; the safety, the reliability, the convenience, the ubiquity of acceptance that we've come to see with the payments networks that have been so robustly deployed around the world over the last 40 years.

Matt Koppenheffer has no position in any stocks mentioned. The Motley Fool recommends MA and V. The Motley Fool owns shares of MA and V. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers