Contactless Payments

One of the most common values that consumer-facing corporations have been pimping in recent decades is convenience... This was readily apparent in the earlier discussion of the appeal of Amazon, a company built upon leveraging convenience through economies of scale. It is also clear that contactless payments have taken off precisely because of the immense amenity of paying by simply tapping plastic against a small payment robot. No longer does it take a whole thirty seconds to enter your pin and dial up, now you just tap and go. Who could possibly complain?

Well, the most vocal objections to contactless payments have been raised in connection with their magnificent potential for fraud. The BBC reported £7 million of fraudulent payments within the UK in 2016, up from £2.8 million in 2015. There is a clear sense of this technology being cyber-insecure, since anyone who steals or acquires a suitable card can use it freely to pay for anything. Even at a cap of £30, large spends can be racked up in days, and the possibility of ‘skimming’ (cloning the radio frequency ID) is occasionally used to scare up panic, although at a required range of about ten centimetres this particular scenario seems somewhat fanciful, and the fraud department I spoke to about this didn’t even consider it a possibility. Besides, in all these cases of petty fraud, the banking organisations behind the cards cover these loses and can easily afford to do so, with the risk to the consumer largely resting in their not checking their transaction list for items they did not authorize.

This year, the media coverage of contactless has focussed less upon fraud and more upon who is now accepting payment this way, which now includes the Churches of England and Scotland, London buskers, and even a vendor of ‘homeless’ magazine The Big Issue. But the prevalence of the payment system – which has overtaken cash in popularity – conceals another concern about its behavioural effects, one no-one is discussing: contactless payments risk being cyber-thriftless, they encourage people to spend more freely, and think less about what they are spending. To be sure, the move away from cash in favour of payment cards already created these conditions for profligate spending by divorcing transactions from the immediate capacity to track your personal money that cash provides. This is offset by easier accounting for those who choose to investigate later – but it’s not clear how many people this applies to.

Say what you will about coins and notes, when you have to get your money in advance by transacting with a bank (these days, mostly indirectly via ATM robots, as discussed in the previous piece), you are aware of how much money you have, and how much you have spent. The contactless cyborg gives up the immediate awareness of what you are doing with your money in return for greater convenience. I suppose at this point, we can hardly be surprised.

A Hundred Cyborgs, #27

Comments

[RodeoClown]

Here is Australia we are apparently the number one in the world for contactless payments. I use it for every payment I ever do with a card. Can't think of the last time I didn't. You have to enter a PIN for amounts over $100, but that's still pretty simple.

I actually work for a bank, and it's way safer to tap than it is to swipe, which surprised me when I first learnt it!

[Malte Kosian]

In the end or the beginning it is a question of the trust chain. Money is a convinient chain of trust between me and you and the inbetweens. Banks for instance.
These techniques have the power to break the trust chain, socially and politically. They already show effects. Though the chain is broken it does not have to show the impact there. It might be somewhere else. It is about the loose ends.

[Noumenalrealm]

I'm a late adopter. I recently received a new phone which allowed for google pay. I discovered that I not only can add my bank cards to it, but a gamut of loyalty cards!

I've recently been interested in this phraseology called EDC (Everyday Carry), which seems to be linked to the prepper movement or people who have interests in tactical/security, but EDC as a term has recently gained currency among other places. I think there's something about modern life that makes EDC a concept - there are so many things we can do with the fancy electronic devices, that a universal convergence of those items becomes desirable. I regularly using my Sainsbury's nectar card and my Boots card generally gives me quite a bit of bonus value from not using it very much.

The institution of cash money is the idea of a promise or covenant ('I promise to pay the bearer') where the physical money itself is not the value but the belief in the institution of that currency (institution used in the sense that Kant might refer to a promise as an institution). Digital or contactless cash just seems that next step.

The convenience of NFC payments does make me (for better and worse) neglect the security or privacy implications of using such an innovation. Apparently my watch is capable of NFC payments too. If I start using my watch to do payments, maybe I won't even need my phone!

It's been too long since I've read your blog, Bateman. Been too busy.

[Chris]

Firstly, let me thank the three of you - stalwarts all! - for commenting on this piece. I was rather discouraged when the 'repeaters' (tweets) ran without the post being viable and nobody noticed, so it is great to have comments on the piece in the end.

RodeoClown: In the UK, the limit is £30, which means I still quite frequently have to use the chip-and-pin method. Despite the negative tone of this piece, I am perfectly happy with contactless for myself - but my wife and I meet once a week to process the household budget. The concern in this piece is merely a worry I have about the technology... (As for safety, it is easier to clone a magnetic data strip than an RFID chip - but both are perfectly possible!)

Malte: This 'chain of trust' idea is an interesting one, but I don't forsee much risk that it breaks down over contactless payments, per se. But this is certainly a factor - and especially in the rise of cryptocurrencies, which some believe forges new trust through its distribution. Interesting perspective.

Michael: It's a great pleasure to get a comment from you... and yes, life gets hectic pretty fast once you get out into employment, and time vanishes. It recedes even further when you have kids as I have discovered! But I appreciate it any time you can drop by. And yes, 'Everyday Carry' is the logical extension of affording so much power to our pocket robots. It is precisely our dependence upon them that triggered my writing The Virtuous Cyborg... something significant happened, and it happened in a barely noticed manner.

Your argument via Kant is sound: the institution remains intact. (This is Malte's point too... although he puts a more cautious spin on it). For me, the concern with contactless is that precisely by reducing the 'friction', it makes spending money too easy. I should like to see if I could get statistics on whether the number of people going into their overdrafts has increased since contactless appeared... I fear there is another side to this convenience we are neglecting - hence this piece.

Thank you all for sharing your perspectives! It is most welcome.