Contactless Payments – The pros and cons of tap and go

Save time, and even some money, with Visa PayWave or Mastercard PayPass cards.

Contactless payment cards are just tap and go. All you have to do is wave your card or your phone in front of a contactless terminal to complete a transaction. There's no need to sign a receipt, input a PIN or hold up a line to make your transaction.

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Rates last updated July 22nd, 2017
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Monthly Account Fee Debit Card Access ATM Withdrawal Fee Fee Free Deposit p.m. Details
NAB Classic Banking
$0 monthly account fees.
Tap and pay with your NAB Visa Debit card, NAB Pay for Android or NAB PayTag for iPhone.
Visa $0 $0 $0 account keeping fees with no deposit conditions. Unlimited free withdrawals at NAB and rediATMs. Go to site More
ING DIRECT Orange Everyday Account
$75 cash bonus & Apple Pay available.
Get a competitive ongoing variable rate when linked with an ING Direct Savings Maximiser.
Visa $0 $1,000 $0 monthly account keeping fees. Unlimited free withdrawals at any ATM in Australia if you deposit $1,000 each month. Go to site More
ANZ Access Advantage
Apple Pay, Android Pay & ANZ Mobile Pay.
Take advantage of Apple Pay by linking your ANZ Visa Debit card to an eligible iPhone and seamlessly pay for purchases with your phone.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at ANZ ATMs. Go to site More
Bankwest Qantas Transaction Account
Earn Qantas Points on eligible purchases and on your account balance.
Conditions apply.
Mastercard $0 $2,000 $0 account keeping fees when you deposit at least $2,000 into your account each month. Otherwise, a $6 monthly fee applies. Unlimited Free withdrawals at Bankwest and CommBank ATMs in Australia. Go to site More
Westpac Choice
$0 ATM withdrawal fee at 50,000+ ATMs globally.
Via Westpac's Global ATM Alliance. Get Cash without your debit card (conditions apply).
Mastercard $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at St.George, Westpac, Bank of Melbourne and BankSA ATMs. Go to site More
BankSA Complete Freedom Account
Cardless Cash available. Open one in less than 3 minutes.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at BankSA, St.George, Westpac and Bank of Melbourne ATMs. Go to site More
Bank of Melbourne Complete Freedom
Get Cardless cash and shop securely with your Visa debit card. Customise SMS and email alerts.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 monthly fee applies. Unlimited free withdrawals at Bank of Melbourne, St.George, Westpac and BankSA ATMs. Go to site More
St.George Complete Freedom Account
10% Cash back for online gaming purchases and $50 cash bonus offer.
Waived account keeping fees when minimum deposit is met with no minimum balance.
Visa $0 $2,000 $0 account keeping fees if you deposit at least $2,000 per month. Otherwise, a $5 fee applies. Unlimited free withdrawals at St.George, Westpac and BankSA ATMs. Go to site More

In only a few short years these cards have gone from the futuristic to the standard, and today you’ll find contactless credit cards, debit cards and prepaid cards.

How do contactless payment cards work?

These cards look just like any other, except they typically have a contactless payment symbol on the front. Although there are some variations, it’s typical for contactless cards use Near Field Communication (NFC) technology. This is generally the same technology as mobile phones use, to securely transmit information over short distances, up to about 4cm.

You can tap and go with both cards and phones, and both are used the same. Simply opt to pay with tap and go, and then wave your card or phone over the contactless terminal to make your payment.

Naturally there are a lot of measures in place to make you don’t accidentally make a payment without meaning to, or that someone can’t hijack the signal to rob you. Thanks to these, and additional safeguards put in place by Visa, Mastercard and Australian banks, contactless payments are in some ways even more secure than classic debit or credit cards.

Are contactless cards safe?

No matter what card you have, there’s always some risk of theft or loss. Contactless cards are no exception, but they do have a slightly different set of risks. Fortunately they’re also protected in many ways, and overall might be even safer than traditional cards.

  • You don’t have to hand your card over: A lot of card skimming thefts happen when you hand your card over to make a payment. Contactless cards don’t have to leave your hands.
  • Unique transaction codes: Every transaction has its own unique code to prevent you from accidentally being billed twice, and to make sure all payments might be clearly tracked.
  • $100 purchase limit: Even if your card is compromised, there is a $100 per transaction maximum in Australia. This means you’ll have to enter your PIN or sign as usual for larger transactions, but it also means people can’t steal as much if they do manage to get at your card.
  • Built-in encryption: All cards can naturally be read by certain devices, and just like updating your software, there are security benefits to going for the newest cards available. In addition, these cards were specifically designed to transmit data, and as such have built-in security features that older cards might not.

In addition to this, you’re also protected by Visa and Mastercard’s zero liability policies. These state that you will not be held liable for fraudulent or unauthorised transactions made on your Australian issued cards, within reason.

“With Visa's Zero Liability policy, you won’t be held responsible for fraudulent charges or unauthorised purchases made with your card or account information.”

This applies to all transactions processed by Visa, with the exception of certain commercial transactions.

“As a cardholder, you will not be held responsible for unauthorised transactions if:

  • You have used reasonable care in protecting your card from loss or theft; and
  • You promptly reported loss or theft to your financial institution.”

This does not apply to certain commercial cards, and unregistered prepaid cards such as gift cards.

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Are there any ways in which contact cards are less safe?

Although they’re safer in some ways, contactless cards are a bit riskier in others:

In both cases you would almost certainly be protected by the relevant guarantees, and would not end up having to pay for any subsequent purchases made without your approval.

The downside, however, is that you would need to cancel your card, and face all the hassle entailed. You’ll need to do this with any card that’s stolen or goes missing, however.

What are the pros and cons of PayWave and PayPass?

Pros

  • Convenient: Just tap and go with your credit card or mobile phone. No need to key in a PIN or sign a receipt on transactions under $100.
  • Quick: No typing errors, like incorrectly keying your PIN or accidentally pressing cancel, plus much quicker transactions.
  • Versatile: Forgot your wallet? You have your phone. Lose your phone? You have your wallet.
  • Secure: Backed up by the guarantees offered by the cards and the latest security technology.

Cons

  • You can generally expect to find contactless readers in most places, but some might not have them and you’ll need to make payments the old fashioned way.
  • You can’t tap and pay on transactions over $100
  • It’s easier to spend more on small purchases without noticing

I’m a business owner. Should I get a contactless payment terminal?

You will almost certainly need to upgrade someday, as contactless payments become more ubiquitous. It might attract additional costs initially, but also carries distinct benefits:

  • More business: If you’re the last one without it, people might start avoiding your store.
  • Quicker service: It’s a lot quicker and easier to process than alternatives
  • Reduced staff burdens: The efficiency benefits can help reduce the burden on your staff

Are there any downsides to accepting contactless payments?

If you fall victim to a scam, such as if you process a stolen contactless payment, and then refund it later to a different account at the scammer’s request, you might find yourself liable for chargeback fees, or other costs.

Merchants bear a lot of the security risks associated with contactless payments, rather than the customers, so it’s important to make sure you fully understand the terms and conditions of your agreement.

Shirley Liu

Shirley is finder.com.au's publisher for banking and investments. She has completed a Masters in Commerce (Finance) and is the author of hundreds of articles. She is passionate about helping Aussies make an informed decision, save money and find the best deal for their needs.

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4 Responses

  1. Default Gravatar
    April 29, 2016

    Hi finder.com.au,

    A lot of retailers ask for your card and tap for you. Does this void any protection under Visa Paywave/Mastercard Paypass policies since the card leaves my hand?

    • Staff
      ShirleyMay 2, 2016Staff

      Hi Aran,

      Thanks for your question.

      Visa’s Zero Liability Policy protects cardholders from unauthorised charges, so whether it’s you or the store clerk tapping your card, you’ll be covered.

      Hope this helps.

  2. Default Gravatar
    garyMay 28, 2015

    just paid by contactless payment but never showed on my account why is this

    • Staff
      ElizabethMay 28, 2015Staff

      Hi Gary,

      Thanks for your question.

      The transaction may not have been processed properly or it just may not have appeared on your account yet. You’ll need to get in touch with your bank/card provider to discuss any questions you have with your personal account.

      I hope this has helped.

      Thanks,

      Elizabeth

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