The introduction of contactless payments has revolutionised the industry. While the payments which can be made using the contactless method are currently limited, it’s predicted that in the future, they will eliminate the need for cash payments altogether.
Contactless payments are seen as a more convenient way to pay, but are they really as beneficial as you think? Or, could these types of payments be causing us to become more financially irresponsible? Below, we’ll look at the effect contactless payments are having on our finances.
Contactless payments behind rise in credit and debit payments
It’s been over a decade since contactless cards were first introduced. Initially people were wary of this new way to pay for low-cost purchases. However, in recent years it seems we’ve let go of our initial suspicions.
There’s been a huge rise in the number of people turning to contactless payments in the past few years. Not only that, but research carried out in 2017, showed that contactless payments were contributing to a rise in spending too. This is because it’s easier to make small purchases without really thinking about it when you’re just swiping or tapping a card without typing anything in. So, people are spending less with each transaction, but making more transactions than they used to.
Fuelling impulse buys
Perhaps one of the main concerns which have come from contactless payments, is that they are contributing towards more impulse buys. While you can’t buy anything large using the contactless method, that doesn’t mean the little impulse purchases you make won’t add up.
There has even been concern raised over whether or not contactless payments are making us unhealthy. The ability to pay for things such as muffins and cakes when you’re in a coffee shop, without really thinking about it has proven to be a challenge for some.
However, the rise in mobile banking has allowed people instant access to their account situation and they are able to make sure they keep on top of their finances. As some apps even send you a notification, showing you how much your latest purchase has cost you.
Making it easier to spend more than we realise
Finally, contactless payments do make it easier for us to spend more than we think. When you’re just making small payments here and there, it’s easy to forget that the totals soon mount up. For example, you could use contactless payments several times throughout the day, not adding up how much you’re spending in total.
In some cases, this can be potentially even more damaging to your finances than if you were spending on a credit card. This is especially true if you have a card which benefits from very little fees and charges.
Overall, there’s no denying that contactless payments have made our lives a little easier. However, when used incorrectly, these types of payments can actually make you much more financially irresponsible. Like any payment method, it’s important to consider your purchases before parting with your hard earned money.