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In: Economics

As an economic term, what is the definition of :Technological Trends? I am working on a...

As an economic term, what is the definition of :Technological Trends?

I am working on a paper that is related to the credit card industry.

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Expert Solution

As with other markets, the credit industry has taken a whole new direction, thanks to the emergence of modern technology. Because of these digital innovations, creditors are able to design and introduce a large number of products and services that make loaning easier, faster, and more affordable for cash borrowers.

In fact, it’s already possible for you to get an online loan with just a few taps on your mobile device. This is a far cry from the old way of doing things. Back in earlier times, your options were somewhat limited to getting a bank loan, using the cash advance feature of your credit card, or borrowing from loan sharks. Because of these limitations, the interest rates that came with the loans were quite high.

While these methods worked in the past, credit companies felt the need to upgrade their lending methods to help out a higher number of borrowers, such as those who are not really planning to apply for high loan proceeds but only need a small amount to tide them over until their next paycheck arrives.

There are also borrowers who work on a freelance basis, so they need to get a loan to finance the purchase of a personal laptop or equipment that they can use for their gig. In this case, they can apply for a consumer financing type of loan directly from computer stores that are accredited by their loan provider.

These are only some of the scenarios that show that loaning has become flexible and responsive to all types and needs of borrowers. With the variety of inexpensive loan solutions that are available, credit consumers have less anxiety and more control in the financial aspect of their life.

This feature infographic illustrates how technological innovations have shaped the current state of borrowing and loaning money.


Artificial intelligence (AI) will power commerce more and more

The profound growth of digital and mobile technologies over the last decade has built a foundation on which AI is now poised to flourish. AI is already doing more than consumers realize, and enterprises certainly plan to keep using more AI in the solutions they offer.

Less signing when you make purchases You've probably noticed that you don't have to sign for as many purchases you did just a couple of years ago. Credit card companies and businesses have lowered the hassle of signing after you swipe or insert your card. These policies are about making things easier at checkout. And the "no-signing" trend continues to gain steam. American Express, Discover and Mastercard have all announced that they are doing away with signatures for domestic purchases (and, in some cases, for purchases abroad as well). You're probably wondering: How will credit card companies prevent fraud if you don't have to sign? Well, first off, your signature at check out is likely a squiggly line anyway, so it's not exactly helping prevent fraud at present. Plus, more and more shopping each day is done online where you don't sign for your purchases. And lastly, credit card companies have improved fraud prevention through better technology (see below for more on that) and customer alerts, so they believe the signature isn't needed anymore. Not signing for your credit card purchases may seem off-putting at first, but once you get used to it in 2018, you'll likely not pine for the days of signing for those purchases. More chip technology Anyone who has used a credit card outside of the U.S. knows that shopping with a credit card is quite different outside of the American borders. EMV technology, which stands for Europay, MasterCard and Visa, is standard in other parts of the world, but Americans continue to occasionally swipe for purchases even if you have noticed a significant increase in the "insert your card" EMV technology closer to home in the past few years. The EMV technology can feature chip and signature or chip and PIN, which offers it a little bit of added protection. EMV stores credit card data on a computer chip embedded on the card rather than on the magnetic stripe you're used to. Card readers that utilize chip technology don't need to be connected to a phone or the internet to approve the charge. That's different from the classic magnetic stripe card that continually communicates with the credit card company.

More metal cards Credit cards are not just a tool to make purchases. In many ways, they've become a status symbol. Credit card companies now offer special cards that set you apart from other consumers. Sure, plastic rewards cards are great, but metal cards can impress. Beyond the look and feel, a metal card's benefits vary by card – just like plastic cards. Some metal cards specialize in travel rewards, while another might give cash back. Some have hefty annual fees, while others are more affordable. Plastic credit cards remain more common than metal cards, but that's the point. Metal cards are meant to stand out. Offering a metal card gives credit card companies another way to tempt top customers and high spenders. In many cases, the metal cards offer similar rewards and perks as regular plastic cards, but with the added benefit of a special card that will get a second look by store employees and friends alike. Furthermore, those metal cards just might hold up better in your wallet.


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