The problem with PayPass
Tap ‘n’ Go technology has come under fire from law enforcement authorities once again with an increase in crime in Victoria being blamed on the debit and credit card feature. More than just a security risk, however, there are problematic financial repercussions that can result from the psychological associations with contactless payment.The main complaint from legal professionals is how easy it is for stolen cards to be used without a PIN or signature when making purchases under $100. This makes it particularly easy for criminals to go on a spending spree before you become aware that you’ve had your purse or wallet stolen and are able to cancel the card.
The process for getting your money back after you’ve been the victim of theft or fraud can be long and difficult and leave you out of pocket for months which can have serious financial impact on people without a buffer fund in their bank account.
In addition to the legal repercussions it plays an interesting role psychologically for users. It is well-known that the use of cards and credit for purchases disassociates spenders from the notion that they are actually spending money. Handing over physical cash in a store is the best way for the brain to understand parting with money and forcing you to stick to a budget.
Reducing the steps required to spend money via card further creates a barrier between the purchase and spending money that you have to pay back in the future. The action of ‘tapping’ is simple and presents the very real danger of over spending resulting in debts that consumers will struggle to repay.
How to control spending
- Keep track of your spending by logging receipts and noting your spending regularly to remind yourself that the purchases you’ve made are with real money that you will be responsible for.
- Avoid using contactless payment. Shop assistants should always check with you before using PayPass or PayWave. By opting no and using the chip or swiping your card instead of tapping you increase the mental connection between the new shoes you have and the money disappearing from your bank account. Even better, avoid using your debit or credit card – leave them at home if you have awful self-control – for in-store purchases and instead use a card to withdraw money from an ATM to pay for products with cold hard cash.
If you are struggling with out of control spending and getting out of debt, you can get in touch with the friendly team at Life After Debt on 1300 237 669 or email us here.