You can’t stand in the way of progress.
but the radio report I heard spent a lot of the coverage on the security issue. Now, I’m not aware of any figures from either the U.S. or Asia-Pacific that show fraud on ‘tap and go’ payment schemes to be any more or any less than on other schemes (if anyone has such figures, please do share them) but that’s not the point: the point is the focus on what could go wrong — despite the explicit statement by MasterCard that customers will not be liable — rather than an exploration of new opportunities.
The security question is a reasonable one: why would anyone want one of these cards when anyone else can use it without a signature or PIN? So you can see why 70% of the public believe that contactless cards will increase the likelihood of fraud, with only 15% stating that they were “very likely” to use their card for transactions under £10 (ie, without cardholder authentication). Ron Delnevo, MD of Bank Machine (an ATM operator) says
So far they have run tests in places like bank staff canteens, very sanitised and safe environments… In the real world, there are a number of serious issues
I think that’s a little unfair on places like the U.S.A, which despite some evidence to the contrary are generally considered to be in the real world. People using the 30 million contactless cards already in circulation there seem to like them. Yet the industry does have to answer his central point: surely people will get beaten up and the cards will get stolen, since each one represents somewhere between £0 and £99.99 of easy money to a thief. Or at least a thief that shops at McDonalds, Eat, Coffee Republic, Yo!Sushi and Krispy Kreme (eg, me). Ron detects a hidden agenda:
There can therefore be only one motive behind this new “wheeze” – rather than being about customer service, it’s simply another manoeuvre by the banks to get rid of the cash that they so hate. I find it ironic that so many people fought to keep our British Pound when it was threatened by the introduction of the Euro, yet we have yet to wake up to this obvious ploy to deprive our citizens of the right to use the cash – and £s – that they prefer”.
I won’t comment about the British Pound — since I’m with the Monster Raving Looney Party on this one, in that I think we should invite other European countries to leave the Euro and adopt Sterling — but I have to say that the agenda is not particularly hidden. Why else would banks introduce a new card product if not to get more usage and in the sub-£10 band, that means attracting customers away from cash by providing a better service than cash. In other words, if contactless cards weren’t going to replace cash, why bother with them? The noted strategic thinker Clayton Christensen understood this the first time he saw the technology demonstrated and agrees with me completely 🙂
For the consumer, PayPass is replacing cash, not credit and debit card purchases.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]