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Scared of cashless payments? Don’t be
The UK Card Association recently published some fascinating statistics relating to cashless payments. Between January and October 2015, the number of contactless credit and debit cards issued in the UK rose by nearly 40% to 76 million. In October, over £929 million was spent via contactless cards, representing a whopping 213% increase over the year.
Earlier this year, Apple took cashless payments one step further when they introduced Apple Pay which essentially turns your iPhone into a credit or debit card. By tapping it on compatible Chip and Pin machine at checkout, users are treated to possibly the fastest way to pay for goods (it’ll even work on your Apple Watch, if you’ve got one). Many of the UK’s leading banks threw their weight behind Apple Pay, with the likes of Nationwide, HSBC and Santander instantly jumping on board the new contactless gravy train.
However, despite the prevalence of contactless terminals and bank-backed reassurance, there is still a degree of trepidation for many when it comes to swapping cash for computer chips and plastic. The feeling of having cash in one’s purse or wallet is, after all, comforting. Are your transactions and personal details safe when you motion your card or phone in front of that Chip and Pin machine?
In this post, I’d like to dispel some of the myths relating to cashless payments. They are safe, but I understand you may need some convincing!
Cashiers love it
You may feel a little daft when first using a form of contactless payment, but it’s a brilliant queue-buster. This is because cashiers are not required to handle anything belonging to you. That’s easier for them, and safer for you.
NFC doesn’t travel far
Contactless cards and smartphones use technology known as ‘Near Field Communication’ (NFC) to interact with payment terminals. If you’re worried about nefarious types hijacking the signal, don’t be – the reach of NFC is below an inch.
Encryption remains top-notch
Contactless payments are protected by the same EMV standard as old fashioned plastic cards. The benefits chips have over their swipe counterparts include each transaction being gifted its own encryption and corresponding key. Therefore if someone did intercept your payment, they wouldn’t be able to use that key for the next transaction. ‘EMV’ stands for Europay, MasterCard and Visa, so you’re in good hands.
You’re limited to £30
Contactless payments in the UK are currently limited to £30, so there’s no way anyone could buy a Ferrari with your credit card. In order to do so, they’d need to provide your PIN code or signature. According to The UK Cards Association, the average contactless transaction is £7.72.
But what if you lose your card?
If you reach into your wallet only to find an empty space where your contactless credit card should be, you’d be forgiven for thinking that you’ve unwittingly gifted someone the ability to spend on your behalf. While technically they could, the contactless system will on occasion force PIN entry to prevent potentially fraudulent multiple transactions. It should be remembered that banks will always be on the lookout for suspicious activity on your account. So you’ll continue to benefit from the same level of protection as traditional swipe cards.
What if the shop doesn’t accept contactless?
If you’re worried about being left high and dry at the checkout, you’ll probably be comforted by the knowledge that there has been a 46% increase in the availability of contactless-compatible terminals in the UK this year, bringing the total to an estimated 296,376. Regardless, you can always fall back on the faithful Chip and Pin entry!
The bottom line
Cashless payments aren’t the future – they are the now. And while we’re probably some way from having a completely cashless society, the benefits of paying for every day items with a simple tap of a piece of plastic or your phone are hard to ignore. It is one of the most secure ways to spend your money. You’ll also be in and out of shops far quicker than ever before.