A penny saved is a penny earned.

What does that mean with the increased use of credit cards? Many say that convenience has replaced thrift. Service users are being asked to pay for the shop owner’s conveniences. A report in the Guardian asks:

“Is this the tipping point that signals the beginning of the end of cash?”

• For the first time, last year, cards accounted for more than half of all retail purchases.
• Ten years after their lukewarm introduction to the UK, contactless payment cards have finally won over the public
• “Contactless,” “wave and pay,” and “tap and go” have been increasing at the rate of 230% annually since 2015
• Now they represent more than a third card purchases
• The use of these extremely convenient cards is making it very easy to spend money, and in many cases, to accumulate interest payments and fees.

Whereas spending money is inherently painful, paying for items with a contactless card “anesthetizes” the pain, seducing spenders. The Bank of England suggests that contactless cards are a big factor fuelling the rapid growth in consumer debt.

On the other hand,

• Retailers are happy.
• The City of London is happy because the automation involved in contactless payment reduces the need for cashiers on the London Underground.
It’s a convenience for the public, but the main beneficiaries are the credit card companies themselves.
• The average effect in the United States is an 8 percent to 10 percent increase in credit card spending that goes into credit card fees and interest.
• According to focus groups, the people who use contactless cards perceive them as part of a “seamless shopping experience.”
• Retailers are happy with the higher levels of control and the higher through-put from the contactless system.

As Amazon opens its “cashierless mini-mart”, it is at the very edge of technology for eliminating human contact at checkout. In that store, there are no shop assistants at all. You take what you want and walk out of the store (unless you are buying an alcoholic product, then an assistant will check your ID).

This is the very pinnacle of contactless shopping.

A large number of ceiling-mounted devices follow and track your purchases. You still pay for them, but in a completely “seamless” way.

• You download an app before you enter the store and the software generates a bar code that gets scanned as you walk in
• The bill gets charged to your Amazon account and you get a receipt in your email.
• Of course, not all the bugs are worked out yet. The app is still not in the App Store or Play Store.

Ordinary contactless shopping feels basic when compared to this:

• You still have to face an assistant who fiddles with a tablet or computer and sets up the little scanning machine
• Usually, you have a choice of going the old-fashioned way of inserting your card into the machine or tapping the small screen with the back of your card
• Credit approvals are lightning fast when you tap, about twice as fast as when you insert
• When you tap you don’t have to sign anything or put in any pin numbers.

In towns and cities all over the United States and Canada, buses and trains are using similar contactless systems to collect fares directly from special debit transit cards, and of course we have Oyster cards in London.

• The system is not so lightning fast, but after a few seconds, it beeps you into the bus.
• You don’t use cash or have to hand the bus driver anything.

The novelty hasn’t worn off yet. Contactless payment is usually offered as an alternative, rather than the only payment system. The real impact of contactless payment is that you don’t have to pull your wallet out and search for coins and bills.

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