The past, present and future of payment cards

In our latest Tech Tribe podcast episode, A Card Is Not Just A Card, G+D Netcetera’s Senior Product Manager Stefan Matheis was joined by Christiane Zhao, Global Marketing Lead, and Rüdiger Vogt, G+D Netcetera’s expert in digitalisation and sustainability, to discuss the evolution of payment cards. Their conversation covered everything from the basics of how cards work to the trends shaping their future. This article explores those insights and what they mean for banks.

Payment cards have evolved beyond the plastic rectangle you keep in your wallet. Today, they exist in three distinct formats, each with its own purpose.

Physical cards are what most people still think of when they hear the word ‘card’. These are the traditional plastic cards with a chip and magnetic stripe. As Rüdiger explained in the podcast, the magnetic stripe is “a bit of a legacy” that we hardly use anymore, but it's still there. Physical cards remain the most widely recognised and trusted form of payment.

Digital cards are representations of your physical card stored in a Digital Wallet, like Apple Pay or Google Pay. They’re linked to your physical card account but exist on your phone. Rüdiger noted that digital cards offer “flexibility” - you can store multiple cards and switch between them easily. They also enable biometric authentication, so you don’t need to remember multiple PINs.

Virtual cards are temporary or secondary card numbers generated specifically for online or in-app purchases. Unlike digital cards, which represent your physical card, virtual cards exist purely for digital transactions. They’re disposable, often designed for one-time use and can’t be used at physical points of sale. As Rüdiger put it, they “add an extra layer of security” by ensuring your real card details are never exposed to potentially risky vendors.

Powering all of this is the four-party payment system, involving cardholder, merchant, issuer and acquirer. In the middle are the card schemes, Visa, Mastercard, UnionPay and others, which operate the global networks that link issuers and acquirers. As Christiane explained, before these schemes existed, “you could only pay with your Bank of America or Deutsche Bank card with Deutsche Bank or Bank of America point-of-sale machines.” The schemes introduced what Stefan described as “a universal abstraction layer to make payments more accessible.”

Despite the rise of digital payments, physical cards haven’t gone anywhere. Christiane noted that “we’re still seeing there’s growing demand for physical cards in different countries and regions.”

One reason for this is trust. Physical cards serve as tangible proof of a banking relationship. For fintechs and neobanks, issuing a physical card is often a way to build credibility. Christiane pointed to examples like Trade Republic (Germany), a trading platform that became a bank. For them, the card acts as a way “not just to prove that now they have a banking licence they can issue a card, but also to gain trust with the customer.”

Physical cards also provide reliability. They work when your phone battery dies, when digital infrastructure fails or when contactless payment terminals aren’t available. As Christiane put it, “we just want to be sure that if our phone isn’t working when the battery dies, we still have something in there to enable us to withdraw cash from the ATM machine or to pay at the merchant.”

Then there's accessibility. Not everyone is comfortable with smartphones or Digital Banking apps. Christiane emphasised that physical cards remain vital for “older people of those with a disability.” Payment, she said, is “a basic right for someone to exercise their rights and freedom in the society.” Removing the option of physical cards would exclude people who rely on them.

Rüdiger shared a personal example from his time in Tokyo. Even though he had digital payment options, there were situations where he still needed his physical card.

Digital wallets have transformed how customers interact with their cards. Rüdiger highlighted three main benefits:

• Flexibility (“I personally have, I don't know, half a dozen cards at least in my digital wallet”)
• Biometrics (“I love the fact that I don't have to remember six different PINs”)
• Speed - particularly in crowded, fast-moving environments

But digital wallets do more than just store card representations. Modern card management apps now offer AI-driven insights, subscription management, carbon footprint tracking and credit score monitoring. Some platforms, like UnionPay (China), allow customers to link multiple cards to a single app and track spending across all of them.

Interestingly, even in digital wallets, cards are still displayed looking like cards. As Rüdiger explained, “the user is so used to having a physical card, that's why the representation in the app even has a card form factor.” This visual consistency helps maintain trust and familiarity.

Virtual cards address one of the biggest concerns in digital payments: security.

When a customer uses a virtual card, they generate a temporary number that’s valid only for a specific transaction or time period. As Rüdiger explained, “a virtual card can be only valid for one transaction, for example when buying a game. And that's it. They can never use it afterwards.”

The technology behind virtual cards is tokenization - the same process that secures digital wallets. Instead of transmitting the actual PAN, the system generates a token that represents the card for a specific transaction. This token is useless to anyone who intercepts it, because it can’t be reused.

Card design has become much more diverse. Cards can now be made from recycled plastic, ocean plastic, metal, wood, ceramic and more. Giesecke+Devrient, as one of the top three payment card providers globally, has been at the forefront of this shift.

Metal cards have become far more common. Christiane noted that “the overall price of the metal card is getting lower, which is why it’s become a commodity nowadays.” Fintechs use distinctive designs as “a gimmick to attract customers from a traditional bank to them.” She gave the example of Foxmo in Germany, which launched a wooden card.

Card design is also responding to demographic shifts, with larger fonts and greater colour contrast for older populations. And social media has amplified the importance of design - banks and fintechs now collaborate with visual artists to create cards that customers want to show off online.

AI is playing a growing role too. Some banks now offer AI studios where customers can design personalised cards. As Christiane said, this “really makes the card a lot more personal compared with in the old days where everyone received the same card with the same design coming from the bank.”

The future of payments isn’t a choice between physical, digital or virtual. It’s about offering all three and letting customers decide what works for them.

Christiane framed this as a question of rights and inclusion: “Payment is a basic right for someone to exercise their rights and freedom in the society.” Different people have different needs, preferences and circumstances. Some prefer the security of a physical card. Others want the convenience of Apple Pay. Some need the extra protection of a virtual card for online shopping. And many use all three depending on the situation.

This diversity of choice also extends to local payment methods. As Christiane noted, payment habits vary significantly by region. “We have observed in many cases where customers might experience challenges in paying in the way they want.” In India, UPI has become the dominant payment method. In China, Alipay and WeChat Pay are mainstream. In Germany, cash remains widely used and valued. A truly inclusive payments ecosystem respects these differences rather than trying to standardise behaviour.

You can listen to the full Tech Tribe episode, 'A Card Is Not Just A Card', on Spotify. If you'd like to explore how G+D Netcetera could help your bank navigate the future of payment cards, get in touch with our team.