Right around the corner is a world with neither cash nor payment cards. Contactless payments mechanisms—built into cell phones or even jewelry—are helping create this world, and the result will help change banking, thinks Theodore Iacobuzio, managing director of Tower Group’s executive research office.

The reality is that companies that once fed the banks’  payment networks—merchants, for instance—will be future competitors. But banks shouldn’t panic about this, any more than when, not so long ago, the Internet was supposed to be extinguishing banks. And banks won’t be disappearing now, either, thinks Iacobuzio: the anxiety over banking’s future, so prevalent in boardrooms around the country, is overdone.

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People have grown wary of credit cards. They’re paying them off faster; generally, debit cards are edging them out as payment vehicles. And at least for now, home equity loans are increasingly more popular than credit cards among consumers (click on inset for more details and see tables below).

The result? Credit card portfolios are losing profitability, even though net losses and delinquencies are down, and serious questions about the industry’s future are surfacing. So are questions about how wise banks were when they snapped up most of the monoline credit card operations last year. The business model needs an overhaul, says observers, but so far, issuers are just changing the oil. And there may be no way out.

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A consortium of six major banks and the country’s largest accounting firms said Wednesday that they were setting uniform computer-security standards, designed to ensure that the third-party computer providers they do business with are adequately protecting both their computer systems and the information those financial firms send them.

“This is good news,” says Avivah Litan, vice president and research director of Gartner Inc. “I don’t think it goes far enough, but it’s smart for them [the institutions] to do it in steps, if that’s what they’re doing. But they need to do it beyond the service providers. They need to do it themselves”

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