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The credit card that we know today has come a long way from the paper it used to be. American Express unveiled the very first credit card made out of paper on Octber 1, 1958 and the rest, as they say, is history.

Through constant innovation, credit card technology made sure that plastic would continue to make paying for transactions more convenient and more secure. The plastic acquired the familiar magnetic stripe and, for a while, it seemed like credit cards were set to become smart cards with embedded chips. Although the concept of smart credit cards were not well accepted, current credit card technology is aiming for an even daring wave of the future: touchless or contactless credit cards.

Contactless technology in credit cards means you pay for purchases simply by tapping your card on a special card reader. You no longer have to wait in a queue to have your card swiped and sign a receipt. The MasterCard PayPass is one example of this contactless credit card technology. Your transaction time: less than a second.

Issuers of credit cards are hoping that contactless payments will be readily accepted by consumers. The realisation of the card industry's vision of the future rests on this crucial interim step. For the industry and many others, there is the belief that contactless payments made through credit cards will lead eventually to the time when devices like cell phones will be used as electronic wallets, carrying consumers' credit cards, keys to home and office, coupon offers and many more.

Ironically, this vision of the future of credit cards may mean the end of credit cards as you know them. Your contactless credit cards could now be built into credit-enabled mobile phones. This opens up diverse uses, such as:

- Paying for usual purchases at stores and merchants
- Purchasing, storing, and exchanging electronic tickets at various live events
- Purchasing and exchanging electronic tickets to buses, subways, and other mass transit systems.

The display will confirm your entry and exit; saved travel details lets you review the information. - Making phone-to-phone payments to people instead of cash or cheque for services, like your doctor, the handyman or the babysitter.

Banks and issuers of credit cards could offer electronic coupons, bank promotions, advertisements (say, about special interest offers on certain deposit certificates), and rewards programs.

The primary value to you for using contactless credit card technology on your mobile phone is the ability to use a single, easy-to-use device for your transactions — all done at faster speeds.

There are security issues to be resolved, but these are minor obstacles. Current versions of contactless credit cards carry only the barest personal information, just enough to complete transactions.

There is also the need to have a critical mass of contactless terminals. In the U.S., for instance, there are 400,000 units over 80,000 locations. This comprises only 1 percent of the whole merchant locations in the country. Korea has a much more widespread network.

These obstacles will have to be overcome to make this future of credit cards materialise. The value of contactless credit cards to you will dissipate unless you can make transactions wherever you are.

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Richard Greenwood, article author is founder of Click4Credit.com.au a website for consumers to compare credit card offers including low interest credit cards from leading banks.

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