Tap to Pay: The Logical Next Step in Payment Technology

Regardless of the solution they're using for payments, the younger folks are all about convenience and actively looking for ways to integrate modern technology into their day-to-day lives. As a result, alternative payment methods are becoming commonplace, making it super rare to see a young zoomer using cash.

At the same time, plenty of people want to shake free of traditional banking and see crypto payments as a probable solution. Where there's demand, there is supply, so traditional payment service providers have also started experimenting with crypto-focused cards, meaning you can now acquire a dedicated Visa crypto card.

Considering Mastercard also announced a brand-new stablecoin, plastic, it's easy to assume the future is already here.

But is it though?

Despite seeming modern, most solutions, such as Apple Pay or crypto Visa cards, still rely heavily on banks and archaic card rails.

An Illusion of Modernity

Let's start with Apple Pay.

At first glance, using it truly seems futuristic. However, behind the scenes, each Apple Pay tap is a carefully disguised Mastercard/Visa transaction.

You see, Apple Pay stores your credit card information, with payment processing through traditional card networks. It creates a token when you add a card (for security), and when you make a transaction, the merchant receives a security code and sends it through the standard payment network, which detokenizes it and links it to your card number.

Ultimately, your bank authorizes the payment, making the underlying process identical to a regular credit card transaction. The elephant in the room is also that you're technically still using your card, only now, it's residing on your phone.

Underwhelming, right? What about crypto cards?

Same. Crypto debit cards are generally prepaid Visa "rigs" wrapped in an app. When you use such a solution, the crypto from your account is just converted into fiat at the moment of the transaction. To necessitate wider compatibility, these cards are generally also only issued in partnership with credit card payment networks, so it's just another card that you basically top up with crypto.

Crypto credit cards are no different, either, with the only distinction being that they offer a line of credit.

Anyway you slice it, with most of these modern solutions, you're still relying on banks and card issuers while being subject to interchange fees. In the context of crypto, which is supposed to cut ties with the "old ways," these payment solutions require you to convert crypto to fiat and load the card until you can spend any funds.

Tapping Your Way to Victory

While not perfect, payment solutions like Apple Pay did "force" merchants to adapt by introducing NFC terminals. Plus, they normalized the act of using your phone to pay for stuff in brick-and-mortar stores.

At the same time, cryptocurrencies are not only experiencing quite a buzz, but the regulatory landscape is much clearer than it was in the early days.

All the building blocks are there to combine the functionality of Apple Pay with crypto, which would, in theory, allow for a payment method that doesn't rely on Visa and similar companies.

Providers like Oobit are introducing Tap to Pay as a valid payment method, eliminating the requirement for a debit or a credit card, and leveraging NFC to enable seamless transactions akin to Apple Pay.

The idea is simple—download an app to get a dedicated wallet you load with crypto and can use to make payments in any store that already has a Visa or Mastercard POS system. The merchants receive fiat, and there is no hassle or the usual card middleman raking in a tiny percentage. Everything is converted in the background in real time, without requiring the classic Visa/Mastercard stack.

Putting the Digital in Finance

Despite being a thing for almost two decades, traditionalists see cryptocurrencies as some sort of woo-woo. Yet, companies in traditional finance (who have skin in the game, mind you) would disagree with this sentiment.

Take Stripe, for example. This payment company made news in 2024 when it acquired the Bridge stablecoin platform for a whopping price of $1.1 billion. It's also worth noting that Mastercard is heavily invested in popularizing stablecoin payments, which is proof that cryptocurrencies will become mainstream at some point in this decade.

All in all, there's no fault in using Apple Pay or even getting a Visa crypto card and pretending to be all cyberpunk—both are much more convenient than handling cash. Yet, it's indisputable that all those solutions continue to rely on traditional financial institutions, which are anything but modern.

Crypto may very well become the go-to payment option in the near future, and when push comes to shove, ask yourselves if you want to hold on to CDs when Spotify is a thing.