Irish Daily Mail

Don’t lose CONTACT with your CASH

Cash is no longer king as tapping cards is the preferred way to pay. But now experts warn it will lead to a surge in fraud anda rise in debt

- By Amelia Murray and Maeve Quigley

USE of contactles­s card payments has been soaring over the past 18 months. As the pandemic hit, cards became the preferred way to pay for both customers and businesses alike.

Banks raised the tapping limit to €50 from €30 as lockdown hit but now it seems that less of us are carrying cash now as we become more reliant on cards as our currency.

Figures released last month by the Banking and Payments Federation of Ireland revealed that we hit record levels of card payments for goods and services in June.

Irish consumers made 2.4 mllion contactles­s payments every in that monht, with 73 million contactles­s payments being made, worth more than €1.2 billion.

The payments were made as Ireland opened its doors again and Covid restrictio­ns were eased for retail and hospitalit­y outlets.

The average payment value for each transactio­n increased to €16.19, from €15.57 a year earlier.

‘At 2.4 million payments per day this is the highest daily level recorded since BPFI began gathering this data in 2016,’ Brian Hayes, Chief Executive of the BPFI said of the figures.

‘In volume terms, the figures represent a jump of 37 per cent year on year while we saw an increase of 43 per cent in the value of contactles­s when compared to the same period last year.’

Our move to card payments might be convenient but there are concerns as money experts fear it could lead to a rise in fraud and overspendi­ng.

Across the water in Britain contactles­s spending is also now higher than ever, while the use of hard cash has plummeted during the pandemic.

As a result the banks there are now introducin­g a new contactles­s limit of £100 (€115) which allows more money to be spent before the cardholder is asked to for a PIN number.

There is a strong chance that banks in Ireland will follow suit and raise the limit but contactles­s card fraud, although low in levels, does exist.

ALTHOUGH it has stayed low, this was in part due to the reduced opportunit­ies for fraudsters because of lockdown restrictio­ns. But personal finance experts fear this could start changing.

Pre-lockdown Bank of Ireland was forced to impose restrictio­ns on debit cards for some customers over worries they have been compromise­d by fraudsters.

And our increasing use of the technology means we are more likely to be targetted.

Sarah Coles, from investment service Hargreaves Lansdown, says contactles­s card use makes bag snatching and pickpocket­ing more rewarding, especially with a higher limit on the card.

‘We could see an increase in these kinds of thefts. Contactles­s features have always been a weak link thieves could exploit.’

Experts also warn that constant card use encourages shoppers to spend above their means and risk falling into debt.

Martyn James from complaints website Resolver, says: ‘We are already starting to see people seeking help with financial difficulti­es after coming out of lockdown and realising they are overspendi­ng.

‘Contactles­s payments allow people to disconnect from their purchases,’ he says. We are all guilty of impulse purchasing during lockdown and now things are opening up, money experts are warning us to be more mindful about what we are spending.

Now that we can socialise again, our guard is down and we are more vulnerable to spending more than we should,’ James says.

He also believes that raising the limit on debit cards is not a good idea.

‘The higher limit is an incentive to criminals, and I would personally prefer to enter a four-digit number than risk losing hundreds if someone stole my wallet.’

Myron Jobson, from broker Interactiv­e Investor, says ‘Contactles­s payments are easy and frictionle­ss but also feels higher limits could result in people spending beyond their means which ‘could lead to debt issues at a time when many are already suffering financial strain owning to the pandemic.’

HE says it could prove to be a ‘slippery slope for some holders of contactles­s enabled credit cards that typically allow users to slip into overdraft without having their payment rejected.’

During the pandemic, the Government encouraged shops and restaurant­s to minimise contact with customers by using payment methods, such as contactles­s, and many are still refusing to accept cash now.

In June, our survey found one in five shoppers had been stopped from paying with cash.

Stacey Lowman, from financial coaching app Claro, says higher contactles­s card limits makes it ‘far easier for people to overspend and reduce the time they have to consider the impact their purchases have on their finances.’

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