Please ensure Javascript is enabled for purposes of website accessibility

A Shift Away From Paying With Plastic

By Kris Eddy – Updated Apr 6, 2017 at 12:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Who loses out if software replaces hardware?

Can you envision a world without swiping?

A Daily Finance article from AOL presents the scenario of how smartphone software could bump the swiping of credit and debit cards to the side, taking business away from card companies and banks, as well as hardware and security providers.

Writes Alex Salkever: "By definition, a smartphone is connected to a fast wireless data network of some sort. It can carry far more financial information than a magnetic stripe, and can be tricked out with far better transaction security than any credit card."

The article notes recent releases from Google (Nasdaq: GOOG) and start-up Square that allowed Android phones and Apple (Nasdaq: AAPL) iPhones, respectively, to enact transactions. It seems like a reduction in the use of swipe machines could benefit retailers and consumers at the expense of card companies including Visa (NYSE: V) and MasterCard (NYSE: MA) and banks that issue cards, such as Citigroup, Bank of America, JPMorgan Chase, and Wells Fargo.

Let me know in the comments box below the pros and cons of smartphones becoming the MO for mobile transactions. Should card companies worry? Do you think retailers will really be off the hook for transaction fees, or will some other company muscle in for that piece of the pie?

Google is a Motley Fool Rule Breakers choice. Apple is a Stock Advisor recommendation. The Fool owns shares of Google.

Fool online editor Kris Eddy owns no shares of any stocks mentioned in this article. Try any of our investing newsletters free for 30 days. The Motley Fool's disclosure policy can fly. Probably.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
Apple Inc. Stock Quote
Apple Inc.
AAPL
$150.43 (-1.51%) $-2.31
Visa Inc. Stock Quote
Visa Inc.
V
$183.96 (-0.98%) $-1.83
Mastercard Incorporated Stock Quote
Mastercard Incorporated
MA
$293.58 (-1.60%) $-4.78

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.