Is that a gun in your pocket?

When you pay with your card in a retail outlet, what is more important - that you pay with a card or that it's you who is making that payment? The industry is still defining CP as "card present", although it should be "cardholder present". Here's why.

Petrochemical derivatives (aka "plastic cards") are being digitized. It's a puzzling paradox that banks tout their mobile wallets and yet are still clinging to those bits of plastic, wrongly believing that they have a "connection" with customers that way. It's time the banks and the card networks understood that it doesn't matter what you have in your pocket.

If I take some US bank card (of mag stripe variety) and use a dongle to copy the mag stripe data onto another piece of plastic, is that cloned card fundamentally different from the original one? Well, the clone would lack "window dressing" - bank logo, card network logo, holograms etc. But who pays attention to those easily forged bells and whistles these days?.. Yet, when I swipe the cloned card, neither the card network nor the issuer would notice a difference.

If I digitize mag stripe data (that's what a card reader does anyway) and then present that digitized data to a POS terminal via my mobile phone, would card networks or issuers know where the data is coming from? No. Should they care? Not if they understand that a piece of plastic per se carries no weight. It's active participation of the cardholder in a transaction that is important.

How can we establish that it's me who is using my card account for a particular transaction? "Simples!" ATM-style online PIN or phone-linked (i.e. out of bound) authentication step. Layer that with tokenisation (that's where the industry is moving to anyway) and then it doesn't matter how you present your card data at POS: via plastic card, via NFC, via Bluetooth or via smoke signals. All that matters is that it's you.

P.S. "Card networks" should rename themselves to "payments networks" to stay relevant and to truly reflect what they do...