Bessie Hassan | Money Expert at finder.com.au
With countless new ways to pay, innovative payment technologies are revolutionising the way we conduct daily transactions and there are many benefits to this.
From “tap and go” contactless payments to digital wallets such as Apple Pay and Android Pay, these payment methods come with unique perks. However, it’s good to know exactly how they work so that you’re more in-tune with the way in which you transact, and so you know how to avoid common pitfalls.
There’s no denying that we’re becoming a cashless society as contactless payments make up more of our transactions than ever before. ING’s International Survey Mobile Banking 2017 – Cashless Society report shows that 24% of Australians would go cashless if given the choice, while 27% don’t typically carry cash on them.
“Tap and go” contactless payments
With “tap and go” payments, cards are equipped with near field communication (NFC) technology, which allows you to approve payments of under $100 simply by waving your card within 4cm of the terminal.
With key benefits such as the convenience of not having to enter your PIN number, peace of mind that you’re being protected from fraudulent transactions and faster point-of-sale times (which means less time standing in line – win!), contactless payments are valuable to consumers.
For ING Direct customers, Visa payWave is making waves (no pun intended) in the payments scene by providing robust security and protecting customers from unauthorised transactions. As Visa payWave terminals are built to process one transaction at any given time, you don’t need to worry about accidently paying twice.
On the flip side, however, contactless payments are only available if you have a credit card or smartphone with payWave or PayPass capabilities. Another limitation of contactless payments is that you can’t change or select a limit per transaction. This is worth keeping in mind for larger transactions.
Contactless payments can also be made using a mobile device that has the NFC chip installed. You can use Apple Pay or Android Pay with ING Direct’s Orange Everyday account, which provides a simple and private way to pay, as you don’t have to hand over your details in store.
If you have an Orange Everyday account, simply visit the Google Play store and download the Google Play app to start making transactions with your smartphone.
Mobile payments offer a great deal of convenience (especially if you’ve forgotten your wallet). They also offer security and peace of mind. If you lose your phone, an Android Device Manager can lock your device and secure it with a new password, which protects you from fraudulent activity.
But, it is worth pointing out that contactless mobile payments can bring your account into the negative if you have insufficient funds, so do remember to keep an eye on your balance.
A recent trend becoming more popular in the payments scene is the rise of interest-free payments. This allows you to make a purchase online or in-store that you can then pay back at a later date, interest-free. For instance, Afterpay and Openpay have partnered with many Australian retailers and allow you to repay the cost of your purchase in installments with no interest charged.
Interest-free payments can serve as an alternative to credit cards or personal loans by allowing you to make larger purchases that you can pay back over time without the added cost of interest. However, it’s important to realise that the eventual payments occur in real time, so if you don’t have the available funds on hand, you could be charged a late penalty fee.
With many alternative payment options now available, it’s worth doing some research to decide how these could complement your spending habits. Like any financial decision you make, make it a smart one too – always read the fine print and keep an eye out for any hidden fees or charges that may apply.