The use of your card with a quick touch to the card reader in a shop is the new way to pay for goods and services under £20, this is contactless payment. It is the future of the debit card and how it is going to evolve in years to come; we might even lose the typical plastic card that has become iconic of the credit and debit cards since their first implementation many years ago.
The Future Of Contactless Payments
There is much debate about the implications of not needing to use a pin or signature to verify it is the card holder using the card, this is open to the use of fraudulent transactions on accounts.
However, this technology is changing and there are developments in technology that is allowing mobile phones to have the details of the cards and contact with the customer’s bank, to allow contactless payments to proceed with the touch of your phone to the card reader.
This is just the start of what the future holds, there is even talk of a development to allow watches or even just bracelets to allow the payment to go through.
What is exciting is the reduction in cloning of cards. There isn’t enough data for a card to be cloned by a thief but there is transmission of your data when you tap your card on the reader. The maximum range is just 10 cm from the reader, but there is some research and evidence to suggest this could be up to 30 cm for some card readers. This means customer’s card details could be obtained by the person standing next to you in the line, using technology to capture the details.
The Benefits Of Contactless Payment
The main benefit that comes from the contactless payment is the convenience it offers the card holder and the speed at which the transaction can process; it is quicker than even putting in a four-digit code.
This means there is less time to complete a transaction making the process for the customer and the businesses quicker.
The Disadvantages Of Contactless Payment
There are disadvantages to the use of any form of credit or debit card, no matter if you have to sign, in-put a four-digit code or even just touch your card on the reader. You are not dealing in cash and it can mean that you are more likely to break a set budget and then you have to do readjustments to bring your accounts back into line.
Using a debit or credit card allows you to purchase more than you might have intended; if you just had the available cash for the items you went into the shop for it can restrict the amount of money you have available to spend. Using a card allows for impulse buys and this can add pressure to an ever decreasing budget that you have.
Therefore, whilst the new technology is welcome and is a great way to go, what it doesn’t account for is the budget that you plan each month, only to break when you see something in the shop and end up with an impulse purchase that you might not really need.