The convenience of digital options compared to both cash and cards is another reason credit cards are gradually being phased out. The ease of digitally exchanging money between friends, or from an employer to an employee, already gives digital transactions an advantage over both cash and cards.
These digital peer-to-peer, or P2P, payments are becoming increasingly popular because they can eliminate high transactions fees and processing or service fees, all while remaining secure. The most widely used platform for peer-to-peer payments is PayPal, with more than 218 million active accounts worldwide. Venmo, an app that allows for instant P2P payments, is another popular platform, while services like Upwork and Fiverr are also taking advantage of the convenience of P2P transactions.
This points to an important truth: Even for most online payments, cards simply aren't necessary.
Because of these challenges and ever-emerging payment alternatives, more and more people are opting to avoid credit cards altogether. The burgeoning growth of card-less transactions is particularly important in light of recent findings from the Federal Deposit Insurance Corporation: In a 2015 study, the FDIC found that a significant portion of American households, 24.5 million, are under-banked. Many people, whether because they want to or because they have no choice, don't own a credit card or have a bank account.