Thought Leadership

Touchless Tech – Is 100% Touchless Possible?

By May 19, 2021No Comments

Our least favourite virus has forever made us rethink the way we shop, spend our money and, most of all, pay for our purchases in a way that avoids transmission.

EMV chip-equipped tap-and-go credit cards have become the most secure, sanitary and ultra-convenient go-to solution for smaller transactions. Other contactless options are mobile wallets or brand specific apps. US retailers and service providers such as Starbucks, Dunkin Donuts and the New York Metro offer apps. And the fuel forecourt giant, BP has instituted a no-touch pay-at-the pump system.

As long as a payment port supports Near Field Communication (NFC) you’re sorted for lower value purchases. NFC doesn’t work on older machines. During 2017 we saw tap-and-go usage in the region of 4%. Now, Visa and Mastercard have reported that tap-to-pay transactions have shot up to record levels – by 100% year on year since we have first recorded the devastating effects of COVID-19.

Our guess is that our tapping habits are here to stay, long after we have managed to conquer the invader. But, while the World Health Organisation advises contactless payments, there are a few other behavioural considerations which could have equally damaging consequences.

The UK raised the ceiling on one-tap payment from GBP30 to GBP45 during lockdown. The Financial Conduct Authority (FCA) is now concerned about moves by banks to raise this limit to GBP100. Despite the benefit of a significant reduction in cash handling, the FCA – whose recommendations are observed by most credit card issuers and retailers – are concerned that it will send the wrong message.

Behavioural scientists cite the following as reasons for concern:
1. Since the introduction of contactless payments, banks have recorded an increase of 30% in transaction value. This has led to reckless spending. It is as though people don’t think of contactless spending as ‘real’ money being spent – cash in their bank account. When one has to produce bank notes, there seems to be a more realistic understanding of the spend, whether it be on lunch or another luxury.
2. The next consideration is around inferred or, what is often referred to as ‘leaked’ information. Leaked information refers to a person’s assumption that if the rules change, it is accepted as being the new norm. Therefore, the assumption is that a GBP100 limit is the new normal average transaction value. It implies ‘It’s absolutely ok to spend this amount on everyday shopping’, whereas before it would have been GB 30 or less.
3. Tap and go reduces the time that it takes to pay, but it also reduces the time to reconsider luxury purchases. It encourages automatic spending behaviour and makes it quicker and easier to part with our hard earned moolah.
4. The last point to keep in mind is that cash is still king in marginalised communities. So, the disappearance of ATMs in a cashless society will not serve the unbanked, elderly and low-income earners. ATMs should be here to stay. Otherwise, a largely cashless society may add to the divide between the haves and the have-nots.

While anyone with a smartphone can access a mobile wallet it still adds a step in the process. It needs verification in the form of a PIN, fingerprint or facial recognition. Undoubtedly, soon one of the financial service providers will be able to secure larger value contactless transactions. All the more reason we should be aware of the unintended behavioural consequences.

Tip of the day: If you are a tapper, make sure that you tap with the service provider that offers the best loyalty points. It can really add up to remarkable benefits.

Altron Managed Solutions
Altron Campus, 20 Woodlands, Woodlands Drive,
Woodlands Office Park, Woodmead
PO Box 3591, Johannesburg, 2000, South Africa
+27 (11) 373 4000