Are mobile payments and contactless cards in competition? If you ask a bank they’ll deny it, claiming that the two fill two similar but distinct customer demands. This argument is largely due to banks and mobile payment providers betting that mobile payments will be used for far more than just paying for things, such as loyalty and location based offers, writes Billy Bambrough

While this may eventually come to happen, right now the western world isn’t big enough for the two of them, banks need to focus on developing one or the other, and contactless cards seem to be the horse to back.

The latest victory for contactless cards has come of CaixaBank investing €500m to build 8,500 ATMs fitted with contactless card readers. The bank intends to overhaul its ATM network over the next 10 years. While the readers will also be able to scan NFC enabled phones and wearable devices against a reader before entering their PIN, the take up of contactless card usage compared to mobile based payments suggests the number of phone and wearable taps will be dwarfed by contactless card usage.

I am far from the opinion that mobile payments through a digital wallet will happen eventually, it is all but inevitable that the world will move in that direction but mass adoption is still a long way off. Until we get to a place where consumers want to use their phone for payments the card will remain firmly in the hand of the payer.

Banks and payments companies should not assume the utility of the card is at its peak. The card should be treated by banks in the same way as mobile, linked to a compressive digital wallet, that allows customers to do everything in the same way but rely on the plastic they are used to.

At the latest Digital Banking Club event David Parker reminded the audience that when we talk about mobile payments all we are talking about is a digital wallet that is accessed through a phone. The digital wallet is the tech that needs to be carefully developed, and customers should be given the choice of how they pay from that wallet.

For the foreseeable future this will, nine times out of 10, be through a contactless card but eventually customers will happy to use their phone and will most likely wonder why they bothered carrying additional and unnecessary plastic around with them for so long.

Any good bank should be giving the customer a choice, but shouldn’t be surprised at the choices that customer makes.