Credit cards are the most commonly used payment method worldwide. However, that will not remain the case much longer, per Roberto Campos Neto. The Brazil central bank chief expects credit cards to become extinct in the coming years.
Can Credit Cards Go Extinct?
Most people will agree that a credit card is very convenient, considering it is a piece of plastic with a chip embedded in it. Credit cards are accepted almost everywhere, both online and offline, making them incredibly flexible and versatile. Moreover, many people wouldn’t be able to picture their payment life without plastic, especially now that cash usage continues to dwindle.
The Brazil central bank chief does not share those sentiments. On the contrary, Roberto Campos Neto is firmly convinced credit cards will go extinct as account-to-account-based open payments continue to increase. Campos Neto had a recent talk during an event about cryptocurrencies, another payment method gaining tremendous popularity across Brazil. He added how users will find ways to control all finances in one mobile solution.
The comments are not overly surprising, as Brazil is home to Pix, the account-to-account payment solution. It was launched in 2020 and was designed to offer stiff competition to credit and debit cards. In fact, it has surpassed the transaction volume of plastic cards in the country already and continues to gain strong momentum.
With account-to-account payments, plastic cards have become virtually obsolete. It may still prove useful to have a card in case of emergency, but for Brazilians, they are no longer the default payment option. If such a system can make its way into other countries, it could offer legitimate competition to Visa and Mastercard. It will be interesting to see how that would play out.