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Credit cards have come a long way since the Diner's Club launched the first 'modern' version in 1950. Roughly 70 years later, credit cards are more advanced than ever, offering a host of perks, from robust rewards programs to the ability to pay by tapping your card or using a mobile wallet.
As we approach 2020, card issuers have exciting advancements in the works, such as the wider release of contactless cards and faster online checkout features.
CNBC Select spoke with four executives from American Express, Discover, Mastercard and Visa to find out what credit card trends to expect in 2020.
Issuers are making a commitment to increase the release of contactless cards through 2020 and beyond.
"Over the next 12 to 18 months, we're going to start seeing almost all of our cards come with a contactless RFID capability," Linda Kirkpatrick, EVP of U.S. merchants and acceptance at Mastercard, tells CNBC Select. "And 60% of our volume is taking place at merchants that have contactless capability already."
Mastercard is also increasing awareness with initiatives such as tap-and-go at subway stations and Fareback Fridays™, where Mastercard holders can use a mobile wallet or tap their contactless card at any participating New York City subway and Mastercard will refund the fare (limit two rides per cardholder per Friday and only during the promotional period).
"We recently released our annual 2019 digital payments survey results, which found that one quarter (26%) of consumers have used contactless at least once within the past six months," Luke Gebb, SVP of digital labs at American Express, says. "We expect that figure is likely to increase as more contactless cards are issued in 2020 and as a growing number of merchants in the U.S. accept contactless payments."
A new trend to look out for is the increasing popularity of digital-first credit cards that can be used instantly at the point of sale. This can best be shown through the Apple Card, which was released in late 2019 and backed by Mastercard and Goldman Sachs.
The Apple Card essentially 'lives' inside your iPhone and is managed through the Wallet app. Cardholders receive the most rewards by using the mobile version of the card versus the physical titanium card.
"In the digital-first instances, you can use the digital representation of the card at the point of sale within minutes of getting approved," Kirkpatrick says. That's compared to waiting days or weeks for a physical card to arrive in the mail.
A common topic among the executives interviewed was the expansion of tokenization. In a nutshell, tokenization replaces sensitive personal information, such as your credit card account number, with a unique non-sensitive identifier, called a token. (Visa has a helpful tokenization resource that explains exactly how it works.)
The token allows payments to be processed without exposing personal account numbers that could potentially be stolen by fraudsters.
"We're finding that this can reduce the risk of account compromise," Brian Cole, head of North American products at Visa, says. "The scope of fraud in tokenization is cut off because the token itself only works for that consumer, on that device, at that merchant."
American Express, Discover, Mastercard and Visa joined together to create a new click-to-pay button. Originally announced on Oct. 22, 2019, consumers can already use a one-click checkout button at participating merchants, which include Cinemark, Rakuten, Papa John's and Saks Fifth Avenue, to complete the guest checkout experience. This feature is expected to have wider availability in early 2020.
Click-to-pay is both more secure and convenient by providing greater consistency and fewer steps at checkout, regardless of what credit card you pay with. It also eliminates the frequency you need to enter personal account numbers and information.
"One-click payment universally across all the checkout points is the next biggest change," Shaida Lynch, VP of e-business at Discover, says. "I think customers and merchants are really confused at checkout with all the different buttons and this will help simplify the checkout process and make it easier for customers."
Looking for a new credit card? Check out CNBC Select's best credit cards.
Information about the Discover it® Cash Back and Apple Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.