Tap And Go Card - The Pros and Cons

FinTech has seen use move into a cashless society, first, we had debit cards and credit cards, then we got QR code payments. Now many major banks have added tap payments to their issued credit cards.

These instant payments make it easier for consumers to make small purchases without having to go through all the trouble of pins on POS systems. It allows businesses to service customers faster and reduce the time it takes to ring up orders, which naturally improves sales.

"Tap and pay" is still in its infancy in South Africa with only a select few customers knowing about it and even fewer using it.

If you've asked yourself, how does this nifty new function work and why would you consider activating it on your card? Let's do a deep dive and see what it's all about.

Tap and pay

Contactless technology allows you to make fast and secure payments by simply tapping your card on a contactless-enabled point of sale device without using a pin.

These low friction transactions are made possible by an embedded chip in cards which emits radio waves. An antenna is built into the plastic to secure the connection with a contactless reader.

This is known as radio frequency identification (RFID) technology and is part of the transition to IoT. where devices can speak to one another and transact without any or very limited human interaction. 

Pros and cons of tap and pay

So now that you know how it works, let's look at the advantages and disadvantages of contactless payment systems and transactions?

Advantages

• Tapping to pay is faster and convenient. This technological innovation makes it possible for a customer to pay without even removing the card from the wallet.
• When tied to a smartphone, such as the Google smartphone, contactless technology offers many features such as remote deactivation, virtual card provisioning as well as further room for innovation.
• You can make contactless payments by using a mobile phone or smartwatch.
• The chip, set in contactless cards, is the almost perfect protection against intruders, providing the maximum security against potential theft of funds. Unlike magnetic strips, built-in microprocessor keeps your details in a fully encrypted form.
• Earning more loyalty rewards from certain banks for more purchases on your credit or debit card.

Disadvantages

• This innovation is yet to be implemented in many commercial places; this, therefore, means making transactions and purchasing goods is still limited.
• Since this innovation doesn’t require a PIN, it means that it’s less secure than chip and pin cards.
• The small limit set by banking institutions on “tap ‘n go” transactions between R200 and R500 may prove inconvenient for shoppers with big shopping lists.
• Fraudulent payment points could quickly push through small payments 
• Stolen cards can quickly be used to make purchases if not cancelled immediately
• More surveillance on your purchase behaviour form banks collecting your data.
• Very few vendors offering tap and go as a payment option.
• Incorrect charges to your card by mistakes with vendors.

Protect your payment methods

Contactless payment systems and cards are going to continue to improve over time as banks find better ways to mitigate the risks and drive adoption with various retailers. The move to a cashless society in many parts of the world is almost inevitable with the fear of carrying cash on the rise as well as the inflation of fiat money making fiat donations worth a lot less in terms of buying power.

Tap and pay might not be the ideal payment method for every situation but it may suit those who like to grab a quick coffee every morning on their way to work or pick up a few essentials.

The upside of convenience needs to be managed with the possible downside of risking access to your finds and its ultimately a personal choice for every consumer on what they value most. 

Tell us your payment story

Have you been using tap and go payments? How has it worked out for you? Let us know in the comments below.

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Recommended reading

If you enjoyed this post and have a little extra time to dive deeper down the rabbit hole, why not check out the following posts on money tips.

• Why You Should Not be Afraid Of Getting A Credit Card
• How to maintain a good credit score
• What Is A Money Market Account?

Tags: Payment Methods, Banking