Nothing… Cardless business travel is now possible

I travel a lot. And I often forget things. Last week I left my payment cards in a hotel safe in Singapore and didn’t realize it until I was going through airport security on my way out of the country. And because of that… well, nothing. It’s a sign of the times that my life hasn’t been affected in the slightest.

No way? No way!

Why didn’t losing my cards interrupt my business trip? You already know the answer. It was because I had my phone with me and all the places I would be visiting were developed countries where all points of sale have contactless interfaces. For anything up to the contactless payment limit (e.g. coffee with a colleague) it’s just “tap and go”, and for payments above that limit (e.g. dinner with clients) it’s, well, just “tap and go”. All thanks to the miracle of CDCVM (“Customer Device Cardholder Verification Method”).

If you are not familiar with CDCVM, here is a brief introduction to high-value contactless payments that I wrote a few years ago to explain how authentication options work with the contactless no-CVM (Cardholder Verification Method) limits. In summary:

• The No-CVM payment limit (£100 in the UK) applies to ‘tap and go’ transactions where no PIN, signature or anything else is required from customers holding their cards over the contactless readers. This limit needs to be carefully set in the context of other risk management parameters as such transactions do not require a PIN, signature, fingerprint scan or anything else.
• This applies to cards. For transactions that come from a contactless device rather than a contactless card, there is CDCVM. It is called device verification because the customer is authenticating to their own device rather than to the point of sale at the store, restaurant or hotel. If you have a device that can implement CDCVM, such as a phone with Apple Pay or Google Pay, this is used as a CVM.

(That’s not the point of this post, but honestly, that’s how it should work going forward, as customers will never again have to authenticate with a device that doesn’t belong to them. Entering a PIN into your own phone is better than entering a PIN into someone else’s terminal, and not just because you could contract a deadly COVID variant by touching it.)

CDCVM means we can use our phones to pay for everything from hot drinks to hotel bills, which brings me back to the crux of my absent-minded anecdote. I told a friend the story – about the forgotten cards – and he said “oh, thanks for the reminder” because he had opened an account with a digital bank almost a year ago and loaded the virtual debit card into his Google Wallet. He had intended to use the bank app to request a physical card, but had completely forgotten. He had been using his new card for almost a year and had never needed the plastic version.

Emily Rueth says that for some members of Generation Z, the concept of a physical card is simply “outdated and unnecessary“And I’m sure that in this smartphone-centric cohort, it’s now reasonable to question why issuers routinely provide physical cards at account opening. As she goes on to say, issuers that offer a cardless option both at the point of purchase and at various points in the cardholder’s lifecycle establish themselves as market leaders by signaling a shift toward customer-centric banking. But that’s true for us baby boomers too, as I was reminded when I went to find my Platinum American Express card to weigh it (don’t ask) and spent 20 minutes searching the house for it, a card I use all the time!

(For example, a friend of mine lost his wallet while out at night in Soho and a few days later received a letter from Transport for London telling him that the wallet had been found on the bus. As it only contained two bank cards and a couple of receipts from the pub, he had not bothered to go and get it.)

These stories are consistent with what the numbers from various markets tell us. Consumer adoption of digital wallets is so high that a French bank has found that every fifth customer Now I choose not to receive a physical card, and I feel sorry for the marketing departments who agonize over card design, colors, logo placement, and experiment with different branding and font configurations, skills that are becoming marginalized by the day.

Cardless travel

Ten years ago, I attended a product launch where Anthony Jenkins (former CEO of Barclays) accurately predicted that mobile phones would replace cards before they replace cashA 2020 Deutsche Bank research report on the future of payments predicted that the rise of digital payments would not mean the end of cash, but rather the extinction of the plastic cardJennifer Leigh Parker commented here last month on Mastercard’s “In Control Pay” service – which she memorably described as “like a disposable phone for your digital wallet” – and concluded that Credit card-free business travel is coming sooner than you thinkWell, I hate to contradict her, but as far as I’m concerned, they’re already here!