Contactless Payments – The pros and cons of tap and go

To tap or not to tap? That is the question when using Visa payWave or Mastercard PayPass.

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Visa payWave and Mastercard PayPass are new ways to pay for your everyday purchases without your physical card touching anything. To use this feature, you need to wave your card in front of a contactless debit/credit card terminal and your transaction will be processed. There are no additional steps to complete, like signing a receipt or inputting your PIN to authorize the transaction.

You can only use contactless payment for purchases under $100. You can tap and go for everyday products and services like groceries, gas, clothing and much more.

SimplyCash Preferred Card from American Express

SimplyCash Preferred Card from American Express

19.99 % APR

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Eligibility criteria, terms and conditions, fees and charges apply

SimplyCash Preferred Card from American Express

Apply today and receive 5% cashback (up to $300 cashback) in the first 6 months of card membership

  • Purchase interest rate: 19.99%
  • Cash advance rate: 22.99%
  • Balance transfer intro rate: 1.99% for the first 6 months
  • Regular balance transfer rate: 22.99%
  • Annual fee: $99
  • Credit rating: Good, Excellent
  • Minimum age: Age of majority in province/territory of residence.
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Compare top credit cards offering contactless payments

Name Product Welcome Offer Purchase Interest Rate Cash Advance Rate Annual Fee Supported Contactless Payments
Earn 2,500 points with minimum spend of $500 for each billing period. Up to 30,000 bonus points in your first year.
19.99%
22.99%
$120
Google Pay
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Earn 5x the points on eligible eats and drinks, including groceries and food delivery, 2x points on transit, gas, travel purchases, and 1 point on all other spend.
Earn up to 35,000 bonus Scotia Rewards points in your first year of card membership.
19.99%
22.99%
$139
Apple Pay
Earn 2 Scotia Rewards points per $1 spent on eligible purchases. Plus, an extra 10,000 points with a min. annual spend of $40,000 on your card.
Get up to 3,000 AIR MILES Bonus Miles with minimum spend of $3,000 in the first three months, plus a first year annual fee waiver. Ends 31 October 2019.
19.99%
22.99%
$0 annual fee for the first year ($120 thereafter)
Google Pay
Get up to 3,000 AIR MILES Bonus Miles with minimum spend of $3,000 in the first three months, plus a first year annual fee waiver. Ends 31 October 2019.
Receive 2,000 bonus AIR MILES® when you spend $1,500 within the first three months of membership.
19.99%
22.99%
$65
Google Pay
Apple Pay
Samsung Pay
Offers 1.99% balance transfer rate in the first 6 months. No balance transfer fee upon application.
Offers 35,000 BMO Rewards bonus points with minimum spend of $3,000 in the first three months of card membership. Ends 31 October 2019.
19.99%
22.99%
$0 annual fee for the first year ($150 thereafter)
Google Pay
Offers 35,000 BMO Rewards bonus points upon minimum spend of $3,000 in the first three months of card membership. Ends 31 October 2019.
Receive 5% cashback (up to $300 cashback) in the first six months.
19.99%
22.99%
$99
Google Pay
Apple Pay
Samsung Pay
Offers 1.99% balance transfer rate in the first 6 months to new cardmembers. No balance transfer fee upon application.
Offers a 7.99% introductory interest rate on all spend for the first 6 months. Ends 31 October 2019.
7.99% intro APR for the first 6 months, 19.99% thereafter
22.99%
$0
payWave
Apple Pay
Receive 1% cash back on payments made at petrol stations, supermarkets, pharmacies and recurring bill payments.
Get 5% cash back in the first three months of card membership with first year annual fee waiver. Ends 30 November 2019.
19.99%
22.99%
$0 annual fee for the first year ($120 thereafter)
Google Pay
Get 5% cash back in the first three months of card membership with a first year annual fee waiver. Ends 30 November 2019.
Offers a 0.99% introductory interest rate on balance transfers with 0% transfer fee for the first 6 months. Ends 31 October 2019.
12.99%
12.99%
$29
payWave
Google Pay
Apple Pay
Save on interest by consolidating your higher-rate balances and get a low 12.99% purchase interest rate.
Get up to 800 bonus AIR MILES reward miles with minimum spend of $1,000 in the first three months. Ends 31 October 2019.
19.99%
22.99%
$0
Google Pay
Apple Pay
Get up to 800 bonus AIR MILES reward miles with minimum spend of $1,000 in the first three months. Ends 31 October 2019.

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What is Near Field Communication (NFC)?

Near field communication imageNear Field Communication (NFC) is a technology that enables your mobile phone to securely transmit and receive information over a short range, typically requiring a distance of 4cm when making a payment. It is an upgrade of the existing radio-frequency identification (RFID), which combines the interface of a smartcard and a reader into a single device.

Visa payWave and PayPass have NFC technology that make contactless payments possible. Referred to as “tap and go”, you can then either wave or tap your credit card at a contactless debit/credit machine to pay for products or services without the need to key in your PIN number or signing a receipt.

What are the pros and cons of tap and go?

Pros

  • Convenient, since you only have to “tap and pay” using your credit card or smartphone.
  • No keying in a PIN or signing a receipt.
  • Gives you peace of mind as you are protected against fraudulent transactions.
  • Reduces threat of hackers who scan cards and steal valuable information, since NFC uses data encryption when sending sensitive information.
  • Cost and time efficient for the average consumer.
  • You don’t have to worry about typing errors (such as incorrectly entering your PIN) and the connection is quicker on the contactless terminal.
  • Retailers no longer have access to your credit card information.
  • You’re able to keep track of rewards and use points for your purchases or redeem miles. Some banks even offer cash back and prizes when you use this feature.
  • Convenient and quick checkout payments means shorter wait times in line ups at stores.

Cons

  • Only some businesses have adopted this technology, so it might create confusion or frustration among users.
  • Not all consumers are educated about this technology.
  • Only consumers with smartphones or those with contactless credit cards can use this technology.
  • You may lose your credit card and your account may be compromised.
  • Risk of spyware or malware attacks and other viruses like any computer device in the terminal.
  • You can only make contactless payment purchases of up to $100.

FAQ: I’m a small business owner – should I get a contactless payment system?

If you run a small business, updating your credit/debit terminal to one that offers contactless payments provides your customers with faster and more convenient card processing. However, upgrading could attract additional upfront fees and extra costs for training to get used to the new system. Compare different card payment systems and weigh up the potential benefits versus the costs to decide if this option is right for your business.

Eddit Grobler

Eddie Grobler

  • Eddie is the Divisional President: Mastercard Australasia
  • He was previously SVP at Mastercard Southern Africa

“PayPass is a fast, convenient and safe way to pay for purchases of less than $100 and involves a simple tap of a card against a contactless reader, making it ideal for use when customers would generally use cash,” says Eddie Grobler, Divisional President of Mastercard Australasia, in a press release.

“Contactless is the way to make and accept payments – it’s quicker and more convenient for consumers and allows merchants to accept more payments at peak sales times. It helps reduce the delays caused by queuing or searching for change and, with consumers already noticing the benefits, we believe it will be available across a large number of retailers in the next couple of years.”

Both Visa payWave and Mastercard PayPass contain a technology called NFC, which requires you to hold the card within 4cm of the card reader and carries a unique security code per transaction for fraud protection. It carries the same layers of security as any other Visa or Mastercard chip card and is backed by their respective Zero Liability Policy.

While it’s convenient and efficient to have this payment method in place, a lot of consumers have questioned the security implications of using this technology. However, Mr. Grobler has announced there are plenty of security measures in the place.

“For online purchases, merchants will be required to offer Mastercard SecureCode authentication, or equivalent, for items over $200 and for purchases at the point of sale, we are ensuring that all cards and terminals will be EMV capable.”

“These measures will add an additional layer of security to an already robust system.”

“Trust is at the very core of our business. We want our cardholders to feel safe about using their cards which is why we are continuing to invest in stringent security measures. Between now and 2013, security for online payments will be a primary focus, which is great news for merchants and consumers alike.”

Eddie Grobler image: nfcworld.com

NFC image: nxp.com

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