"Great" I thought. I'd been wondering when they would come out, as chip cards are supposed to be more secure.
Part of the letter explained about a new contactless payment system incorporated as part of the cards called PayPlus. This is MasterCards implementation of Near Field Communication based payments (see http://en.wikipedia.org/wiki/MasterCard#PayPass ). The Visa equivalent I understand is called PayWave.
The letter explained that for transactions of less than $80 no pin was required. Now of course you do have to find a retailer that would support this, but I would assume these would start appearing, and the concept is similar to my Snapper card I use occasionally for the bus.
But the idea of no pin, no signature linked to my credit card had me a bit worried.
As snapper is effectively a cash replacement - and in some ways it is more secure than your wallet (where your cash normally resides)* Because of this, the balance kept on my snapper card is akin to what I'd hold in my wallet, not much more than $20.
But the idea of up to $80 payments possible off a household credit card gave me shivers down my spine. How many people do not check their statements? Or if they do, only when it's sent to you? Ok sure, the card has to be out of your possession, and generally you'd cancel the card as soon as you realise it's gone, but it still left me feeling uneasy. With a regular credit card loss, apart from McDonalds**, there was a modicum of security, someone would have to forge your signature (probably fairly easy to do) or gain access to your pin.
But the thought of someone just having to tap the stolen, or misplaced card on a terminal to have access to your funds seemed to be a lowering security. I like to think of this contactless technology as a cash replacement...and therefore the value of cash transactions - generally fairly low....not being linked to an account with enough money to cover the household spending for a month.
I saw another user ask @ASBBank on twitter if the limit could be (I assumed) lowered...this was something I'd been thinking of, and I asked if it could it be disabled entirely, the answer was no to both questions.
I'm all for new features, and quite like the idea of contactless payments, don't get me wrong. But I don't particularly want it attached to a credit card that I've purposely never put on the internet, because it's used for the household, and so it's limit is appropriate for household spending. I have another card with a $500 limit that I use for internet based transactions. A separate, opt in, card would have been, in my opinion, the preferable way of implementing this.
BTW this probably isn't so much a dig at ASB Bank, and I think this would be part of their membership to the card schemes, and I'd imagine all the NZ banks would be doing similar. And all have the same sort of implementation.
* if you lose your snapper and it's registered, it can be stopped and/or refunded. If you lose your wallet, you've probaby lost your money.
** McDonalds (and maybe others) has allowed no pin or signature on transactions valuing less than $15 Correction, apparently it's $35 - which I think is worse.
Other related posts:
eReceipts - Why don't we have them yet?
Contactless Payments - part 2
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