/ Money, Technology

Do cashless payments really make your life easier?

contactless payment

Whether you’re catching the bus, parking your car – or paying for your child’s school dinners – you’re now often told you can’t use cash. Cashless payments are supposed to make life easier, but do they?

For example, you can’t take an impromptu bus ride in London. You’re expected to constantly carry your contactless Oyster card – on the off chance you might fancy a bus trip one day. I think that’s ridiculous.

The other week, when I was visiting my extended family, we went on a walk that lasted longer than planned. So my parents suggested we get the bus back. But I didn’t have my Oyster card and don’t have a contactless payment card, so Mum bussed it with my youngest, and the rest walked with me to keep me company.

OK, it got me out of helping prepare lunch, but whose idea was it to complicate such a simple thing – pay money, get on bus?

As any parent knows, there’s plenty to carry as it is. Water, snacks in case there’s a traffic jam, sun cream in case the sun shines, a brolly in case it rains. A change of clothes for when the kids fall in mud or dog mess, or they throw up in the car. Money, plasters, keys, phone … and on top of all this the payment card.

Should you have to make cashless payments?

Buses aren’t the only places that restrict how you pay. My children’s school only accepts payments online. Previously, you’d get the letter home about a school trip, then take in the cash. If you forgot or the letter went astray, you’d pay up when the teacher reminded you.

But now, the teacher reminds you, and you have to remember to make the payment. Which can be a long time if you’re heading off to work, rather than back home to your computer, or if your internet’s down.

In my case, I have to remember to remind my husband, as the login’s in his name. And then remember to check he’s done it. Which means we’ve had to introduce an admin system to make sure our kids don’t miss out.

I’m not against cashless payments. It’s no doubt easier for those accepting the payments and it can be easier for those of us making them, too.

Paying for parking using your mobile, instead of scrabbling around for loose change, for instance, is a great idea. Provided, you have a mobile on you that’s charged.

Why don’t those who introduce these cashless systems acknowledge that sometimes we can’t or don’t want to make cashless payments? Progress should make life easier, not more complicated.

What do you think of cashless payment systems? Do they make your life easier or more complicated?

Comments

I cannot understand the reluctance to migrate to contactless cards. They’re quick and easy to use (more so than cash in general), They are much lighter than cash and don’t bulge your wallet or pocket as much. I get a statement of every transaction (not the case with cash), and the issuing bank has liability for any fraudulent activity (not the case with cash). (Assuming of course that I am not negligent – but in practice the banks pretty much always pay up unless people have been *really* stupid.) The cards are small and light (not the case with cash.) So what’s not to like?

The limit is £20 but upto 6 times, so if the cardbis lost or stollen, upto £120 leaves your account.
Whether you get it back depends on whether your bank decides if the loss was due to your negligence.
If would not walk around with £120 in my pocket and I do not see the point of chip and pin and then introducing a system with no security.
If I drop my card in the street or leave it in a machine is that down to my negligence?
We need the choice and many banks are not offering e.g. Metro bank and Barclaycard. I gave up BC because theycould not offer a card without contactless payment.
The banks have introduced this to make even larger profits. There have been double charges against cards in the same holder. Why should the problems be left to us to sort out?

Neville, carrying £120 in cash is not the same as a contactless card. If you lose £120 cash, it is your loss. If you lose your contactless card and someone spends £120, it is the card issuer’s loss. You’re worrying about a potential liability that is not yours.

Surely it is a matter if your card issuer determines if the loss was your negligence

Negligence would include writing one’s PIN on the card or keeping the PIN with the card. Given that contactless doesn’t need a PIN, it would be hard to prove negligence.

Simon Johnson says:
18 July 2015

Apple pay is old hat to the Danes as they have been using contactless for over a decade. Their acceptance of electronic payments was reinforced recently when they passed a law so businesses are no longer legally-bound to accept cash.

http://www.telegraph.co.uk/finance/economics/11586778/Denmark-moves-step-closer-to-being-a-cashless-country.html

Although modern payment methods are all well and good for most people we should bear in mind the 5% of the population still don’t have a bank account and also the 20% of people don’t have a smartphone, not to mention those who have a smartphone, but struggle to use them.

I have occasionally used my contactless card and it is convenient but, if I mislay my card or it is stolen, presumably anybody can use it to make any number of small payments. Who would be liable for these payments, presumably me.

Morning Brian, fraudulent transactions on contactless cards are protected by the same rules that apply to other card payments. This means that if you’re a victim of fraud, your bank will refund you the money, provided it’s not a result of your own negligence. However, you will have to pay the first £50 of the total amount of fraudulent transactions made on your card.

According to the UK Cards Association, there has been no evidence to date of any fraud losses arising as a result of the introduction of contactless technology.

In practice, the first £50 is always covered by the bank in my experience, even though the terms and conditions may state otherwise. Much safer than cash – if you lose that, no one is going to reimburse you!

Does this protection apply if you use another NFC device like Apple or is it only for Bank provided cards?

Sorry posted the above comment midway through the process OOps

Here is something on fraud showing the current weakest link. If you have doubts as tto the sanity or probity of banks in general ……

http://www.theregister.co.uk/2015/03/03/apple_pay_plastic_fraud/

Apple Pay uses two-factor authentication, so it is as secure, if not more secure, than Chip & PIN. Like Chip & PIN, Apple Pay has no transaction limit (even though many retailers are temporarily imposing one until they upgrade their terminals’ software). Apple Pay uses virtual cards provided by the card issuer, so it does indeed enjoy the same protection.

W A Smith says:
18 July 2015

I have heard that you can get a freer app for smart phones that will read the card details while it is in the pocket of someone you are standing next to. Indeed \i mket a man who claimed he had such an app. Sureely this a a security problem. By the way the £20 limit is (or has) gone up to £30 and it only applies to Pounds, So use the card details abroad and there is no limit!

You are worrying about a type of fraud for which the card issuer, and not the card holder, is liable. It is no reason for a consumer to avoid contactless cards.

It is EVERY reason

Your lack of reasoning for your comment suggests that it is not “every reason”.

I suspect the point Cyclee may have been making was that fraud involves a cost – whether it is the issuer or the user is irrelevant because in the end it is the recipient who will fund fraud costs, even indirectly through higher prices. The question perhaps is, do electronic transfers involve a higher fraud cost than losses using cash for equivalent transactions. Probably no answer to that.

If you’re looking at the total cost on the assumption that the customer ultimately pays, I’m sure that the costs of card fraud on a minority of card transactions are much less than the high costs of handling physical cash on every cash transaction.

Perhaps someone has some numbers to illustrate what you assume.

L Dee says:
19 July 2015

I appreciate that contactless cards suit many people but I don’t like that there’s no option to choose whether to have one before it is issued.

My father is in his mid-80s and is in the early-mid stages of Alzheimer’s/dementia and his debit and savings account cards have recently been changed to contactless cards.

My dad still has some independence and will travel short distances by bus. He needs routine and processes that he is familiar with too so his debit card is in the wallet with the OAP travel pass. I noted on a bank statement that he had been charged £1.50 for travel once or twice – this will be because of card clash. I tried explaining it to my father but understanding this type of technology is something that he now struggles with and would be stressful for him. He is comfortable with cash because it is tangible, even though it might take a little longer.

Younger people who have grown up with these technologies may be ok with it by the time they reach their twilight years but for those who don’t want it or for whom it is another thing to try to understand, it’s a bit of a challenge. I now have to spend on card shields to stop my father’s cards being debited inadvertently. Perhaps the banks should provide the shields with the cards if they insist that their customers must have them….

Time for you to change your dad’s bank, maybe? You shouldn’t have to have what you don’t want / can’t use.

Robert C says:
19 July 2015

Our local council has changed pay (for what you used) on exit to a pay and display (so you have to guess how long you need ) and pay extra / play safe. Some are cash only and some offer pay by phone (for which they said there would be an extra charge. I have also been charged a fee for using a card, so which do they want us to use, cash or some sort of card ?

I agree that being forced to guess in advance how much of a service you’ll need is wrong. This also applies to mobile phone service, where you have a buy a monthly allowance in advance rather than a simple system of paying in arrears for what you use. The only reason for operating such a system, whether it be car parks or mobile phone service, is for the service provider to charge for more of the service than is actually consumed. Imagine if we had to buy energy in this way. We wouldn’t tolerate it with energy, so why do we tolerate it with parking and mobile phone service?

The ways we are being forced to pay continues to alter. Try crossing the Thames at Dartford. There is no way to pay in cash, of for that matter, with your contactless card. It basically demands use of the Internet which is not always easy when travelling.

NFH do you have a professional interest to declare?

No, my industry is not retail banking but wholesale foreign exchange, and where retail banking overlaps with my industry, I oppose most retail banks’ policies and charges. I am looking at this in an objective way. Looking purely at the economics of it, cash fares are unsustainable on London buses. Nobody here has suggested a way that this could work financially.

Dare I suggest that some people value other things as highly money. The feeling of control, choice are important and the fact I decide who and how I pay, for what.
If I lose my card am I negligent, who decides me or the card issuer. If card clash occurs how long does it take me to sort out.
Why should I accept a company imposing a service on me I don’t want for my benefit. If it was the government, I would be shouting nanny state.
What has happen to the old maxim the customer is always right. Why should we accept london transport unilaterally imposing terms and conditions on us.
In fact I am happy with the oyster card as a prepayment card, as I can determine my risk by how much I load it. My objection is more on the contactless card where I have no control over the size of the limit of each transaction or the number of times it can be presented before a pin is needed.

If somewhere as cashless payments only I won’t buy from them simple as that. My bank sent me a contactless card. Told them I didn’t want it so they sent me a normal one. Once we allow cash to disappear they have even more control over us than they already do which is already too much.

If your bank sends you a contactless card, then you don’t have to use it contactlessly. Any liability for fraud is the card issuer’s and not yours. Therefore why did you object to strongly to having one?

The objection is being told what to do. That generates resentment and may have encouraged claims that contactless cards could be read accidentally.

Common sense suggests that you should ask customers whether or not they want a contactless card.

But you’re not being told what to do. You don’t have to use it contactless unless you want to. Anyway, as I mentioned above, I do agree with this point with regard to debit cards.

Many are not happy about being sent contactless cards without their agreement. Patrick has provided one reason why their concerns may be justified: https://conversation.which.co.uk/money/are-cashless-payments-contactless-payments-easier/comment-page-1/#comment-1414000

I am careful to keep track of my spending, most on my credit card, to avoid bank charges, so keep card till receipts and record all transactions on my Quicken software. I take £20 or £30 out now & then, for small purchases like a pint of cider. That way I keep track.

D. Tibbott says:
19 July 2015

What has happened to the concept of legal tender? As I understand it, it is illegal to refuse payment in cash.

Legal tender applies only to settlement of a debt. For most purchases, a trader can refuse to accept your money and to sell you the goods or service, and so no debt is incurred. For some goods and services, payment is made after the goods or services have been consumed or taken, for example petrol and restaurants. These are the only types of retail scenarios where legal tender becomes an issue.

Must remember this is not strictly about a trader, but about the operator of a public service where social as well as business rules should apply.

Can someone give examples of traders dealing face to face in relatively small scale transactions will not accept cash as payment?

Many workplace canteens haven’t accepted cash for 10 to 15 years. When everyone is trying to pay for their lunch, cash takes too long, mainly because of the need for the payer to give the right change or for the payee to give the right change. Instead, balances are loaded on to one’s workplace security card, usually by credit or debit card.

NFH – Your example is not trading is it. Captive market is hardly a good example as everything can be done to optimise efficiency.

FYI House of Commons restaurants take cash and workplace cards.

C Gillett says:
26 July 2015

You may be right, but if I create a debt by, for instance, filling my car with
petrol, then cash has to be accepted.

That may be so but you do not create a debt by attempting to board a bus.

There is no charge for an Oyster card, it gives cheaper travel, and is easy to keep topped-up, so I find it hard to understand the objections.

I am also at a loss to understand the social arguments relating to this. Unlike rural areas, London has an integrated, highly efficient, frequent, 18 hrs a day plus, public transport network such that no one lives more than 400 metres from a bus route and the Underground and Overground reach far out into the suburbs. This system comes with a cheap fares structure and a comprehensive payment system that is extremely popular and regarded as the best in the world. My view is that the social requirements have been fully satisfied.

Buy tickets at machines in stations, at shops, post offices. I have seen machines accept coins, notes and cards. Perhaps one could buy a book of fixed value tickets.

Mikhail says:
19 July 2015

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John says:
19 July 2015

Banks should not presume that all there customers want this service it should be about choice . It would have been nice to have the choice or an option to turn it of at an ATM.

Enquirer123 says:
20 July 2015

I attempted to pay for a FirstBus fare with a Scottish Tenner and was told their cash machines couldn’t recognise them! This was before the Referendum and from a company who run buses here in Edinburgh. Luckily the bus stop was outside a friendly pub which swapped it without requiring a purchase, as I carry little cash because I prefer cashback cards.

Enquirer123 says:
20 July 2015

Oops! I neglected to say I was in Norwich.

First Group also operates bus services in the USA but you wouldn’t expect to use US dollars on a Norwich bus. Thankfully we can still use Bank of England notes and UK coinage on a Scottish bus but I always carry some Scottish banknotes in case of a snap change of mind.

Elizabeth says:
20 July 2015

I had no idea you couldn’t use London buses without having an Oyster card. Having a disability I find this concerning as using the tube would not always be possible due to the stairs.
As I’m not a Londoner I would not have known about the necessity to buy an Oyster card.
It seems to me London travellers have become part of a private members club where travel in London is only for those who are members of the club, know the rules of the club and have bought Oyster cards in advance.
Do I take it these rules are written up on big signs at London railway stations so that when I get off the train in London on my next visit I have some guidance on what to do in order to catch a bus? Or do I just get stuck?

Elizabeth, if you have a disabled person’s bus pass [issued as part of the English National Concessionary Travel Scheme] you can use it on London buses for free travel – you would not need an Oyster card. If you don’t already have one contact your local council* to find out which authority issues disabled persons’ bus passes in your area. You are eligible for a disabled person’s pass if you live in England and are ‘eligible disabled’.

*In rural areas these are usually issued by county councils but it is more complex in urban areas because there are different types of authority with public transport responsibilities.

I should have added that there are many Underground stations that are now entirely step-free from the street to the platform, and another group that are step-free from the street to the train. At several stations that only have escalators the platform has a raised section that means that there is a level path onto the train; this is especially useful for people changing from one line to another at base level and not needing to go up to street level. Transport for London publish a special guide and Underground diagram that shows all this. The TfL website is also helpful and the journey planner feature enables a step-free route to be planned.

You may be interested in our latest research – our researchers have discovered a security flaw in contactless cards that thieves could exploit to make expensive online purchases: http://www.which.co.uk/news/2015/07/which-reveals-contactless-card-flaw-409322/

This is interesting, but it nevertheless represents a fraud risk for card issuers, not for card holders. Therefore although it’s something that consumers should be aware of, it’s not something for consumers to worry about. The card issuer would suffer the loss.

But, NFH, the loss is passed on to the consumer in the end.

Malcolm, that’s not my point. If a £3,000 fraud is carried out on one card, then it is not a £3,000 loss for the holder of that card. The loss absorbed by the card issuer. Any diluted effect on individual card holders is negligible, unlike a £3,000 loss to a card holder.

NFH, yes, I did understand your point. But like all fraud – insurance, cheques, credit cards- it is not a victimless crime. In the end we all pay for the losses suffered; agreed, spread across all users. It can be significant; I understand for car insurance we all pay around £40 (is this the correct figure?) more than we should because of fraud and uninsured drivers.

Martin Wood says:
23 July 2015

Dear Which,

We are often told, quite rightly, by banks that we should all check our monthly bank statements for fraudulent entries and I certainly do this. Now imagine a bank statement with hundreds of items for small amounts (I assume they would be listed individually). Most people wouldn’t bother to check and in any case to do this properly you would have to keep every receipt- life is too short!

So the door is wide open for fraudsters to insert large numbers of small items on large numbers of accounts knowing full well that most people would not have the time or patience to check. The fraudsters just have to work out a way of doing it, which I’m sure they will in due course.

While I favour, and use, debit/credit cards and internet banking I am against cashless payments for the above reasons.

Martin Wood
Member K001374335