Tap-and-go Debit Cards : Credit Card Guide

Tap-and-go Debit Cards

The new tap-and-go type of debit card is destined to become increasingly popular with consumers, doing away with the need for pockets weighed down by small change. It looks like a good thing, but there are concerns for security and peoples’ use of the cards.

The new cards work by touching the card against a receptor pad at shop tills for items totalling £10 or less. The cards may be credit or debit cards, and the money is transferred immediately to the retailer from your account, without the need for a PIN number or a signature at any time. More retailers are signing up for the tap-and-go cards all the time.

Visa and Mastercard cards can already utilise the technology on terminals around the world, and they are deciding how to send out cards to customers. Barclaycard’s OnePulse was the first such card, employing both the tap-and-go features and the Oyster card facility used to make payments on buses and on the Underground in London. Halifax, Barclays and Royal Bank of Scotland will soon be following suit.

The technology is already in use in 19 other countries, including the US were 16 million cards are in use, creating hundreds of thousands of transactions every day. The cards are popular because they offer a faster method of payment that fumbling around for change or waiting for change. Transactions are limited to £10 or less. Card providers say it’s about convenience and choice for customers, and use the example of a busy sandwich shop as a potential place of use. Other places where they could prove extremely popular are in car parks and vending machines which drain people of change (and often offer none in return).

The cards have been tested on “guinea pigs” around the country. People who have tested the cards find them convenient, easy to use and quick to rely on.

The first cards to be used in wide commercial use will be in central London where shops such as McDonald’s and Coffee Republic are beginning to install the new technology. Other tap-and-go readers will soon be available in car parks, vending machines and in taxis. By November, there are likely to something like 6,000 locations which will take tap-and-go payments. If plans stay on track the cards will go nationwide in March 2008, with around five million cards to be in use by the end of that year.

If customers lose a card they will not be liable for any spending on it, and as an extra security measure each card will have a limit on the number of uses before a PIN number will be required.

One concern with the cards is that they will lead to unbudgeted spending – the convenience and low amounts giving users a false sense of low-spending security. Many low income groups take out cash from an ATM, and know when it’s run out it has run out. The same won’t apply to a tap-and-go card, and a shock might arrive with the bank statement.

Tom Smith
28th September 2007

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