5 ways Your Contactless Payments Cost You More

Contactless payments have revolutionized the way business is done all over the world from developed nations to the not-so-developed. The idea of not having to carry cash when going shopping, or the knowledge that you can access your cash anytime and anywhere is exciting as well as easy. But there is the flipside to it or as I like to call it the financial cost of contactless payments. Have you consciously considered how much it costs you to use these forms of payments when you spend?

Hidden costs of contactless payments

Let’s first of all talk of some awkward moments that contactless payments have got people into. You buy goods in a store and swipe your card as a matter of routine, but instead of getting things moving as usual your card is rejected. Why? How would you know and how would you deal with it? But in this case it doesn’t matter as according to the innocent cashier the transaction has gone through on her end! Did you really pay for your goods? Is the card actually working or has some passer by just paid for your shopping without realizing it. Sure it sounds funny but do you realize the amount of control we have surrendered while using these pay-wave systems?

Now fast forward a few days later when you realize that the MasterCard that was safely secured (or so you thought) in your pocket at the time of the transaction is actually the one that was debited with the transaction. Thus accruing fees and interest you may not have prepared for or even having the following affect of not having the money available on that card for a different planned transaction! Now having to tidy up the payment mess you just made between your MasterCard and your Visa Debit Card will definitely wipe off any smile you may have had. Who said that paying cash versus payWave was easy!

Similar cases have been reported by people going contactless on their public transport, sometimes ending up with a double payment for the same fare. Chasing these incorrect charges later is another financial cost of contactless payments you may not have considered. And as you know dealing with financial institutions or bureaucracy can be a challenge but none more so when it comes to the matters of some ‘pest’ called ‘a refund’.

The change of behavior with contactless payments

1. Transaction charges
   When you and I flash our cards with the the ease and flow of technology, we hardly think of the financial cost of contactless payments. Yet the pennies and cents that the bank charges on these transactions add up to a lot. This can start with the vendor/store but do you really think their not passing the charges on? When we are considering the cost of paying cash versus payWave with a quick casual glance your might not have considered this. Anyone who knows how the market works will tell you that such costs are absorbed by you and me; some prices of goods and services have to be increased so that the vendor’s profits remain unaffected. So if across the board everyone is being charged more fees for this style of payment who pays? We do.
2. Haphazard buying
   You need to be disciplined in your budget and in making your daily purchases but that is a theory we often forget with the contactless payments taking away all the conscious thought. You don’t want to spend 2hrs doing your shopping in the supermarket because you know time equals money. So I know what I do when it comes down to the easy of contactless payments I often duck in for a few items and get out fast. Thus I end up making many different transactions at different times and if your like me dont consider the fact that you are spending more on fuel running these errands. You also do not quantify the time you spend doing disjointed shopping. Effectively the technology is helping you lose track of your budget and planned spending as its a quick five minute shop not a planned one.

• Buying on impulse
  In the good old days (of the ancient 90s and early 2000s!) you decided what you wanted to buy and you only added something like $20 to the total and that is all you withdrew from the bank. Today you reach for that card from your pocket as soon as your mouth waters at something. You even make unplanned long distance night trips for snacks/treats you dont really need nor would of bought had the gas station not joined the techno-paying craze!
• Security risk
  Let’s think about the opening scenario described above for just another moment. If the store could read a card from the customer’s pocket in error, what would make you feel protected from a thief with a card reader standing next to you at the counter? Read around on the web this has happened to plenty of people right now, and that is really scary. With the liberty of making transactions of up to $25 in the US or £20 in the UK, the techno-savvy thug could go on a shopping spree and reap from your sweat and the inefficiencies of technology. Is this reason enough for you to to leave the cards home and carry cash instead?

And on the same issue of contactless payments security what would be the financial cost of contactless payments if you were robbed or lost your wallet that had, say, four or so Visa Cards. If whoever finds your obtains your wallet decided to use them to the maximum via contactless? Even if financial institutions reckon their systems sense danger after a series of transactions and hence demand that you key in your PIN, you will still have lost both time and money. Can you afford either?

Know someone who had misadventure with paywave or contactless payments? Want to leave an opinion? Comment away and dont forget sharing is caring.

***Photos thanks to Ken Teegardin of Flickr and Wikepedia***