Personal Finance Editor
A business, finance, and property journalist and editor of more than 15 years, Nicole has written for Australian Financial Review, Sydney Morning Herald, The CEO Magazine, The CFO Magazine, Domain, Queensland Business News, The Australian, Australian Property Investor, news.com.au, Sunday Life, Women’s Agenda, REIQ Journal, and The Age, among others. She has a Bachelor of Business Communications, and a Graduate Certificate in Business Administration. She was previously an on-air reporter with Channel Nine, and is the author of two children’s books. She is passionate about the importance of financial literacy, starting from childhood.
In case there was any doubt, the recent news that Mastercard is phasing out magnetic strips is solid indication that contactless payments are here to stay.
The firm claims to be the first payment network to phase out the magnetic strip technology that was the norm for decades, with many regions able to issue strip-less cards from 2024.
By 2033, they’ll be gone for good, in favour of chip-and-pin or tap-and-go options, along with new biometric cards that use fingerprints.
While the card market was already moving towards contactless payments, COVID-19 has propelled the transition, with an increasing number of retailers reducing or eliminating contact payment options.
In some states, the tap-and-go limit was increased from $100 to $200.
And while research shows most of us are on board, there are some concerns, and most of those relate to security.
Chief Technology Officer, Shane Pollard, prefers contactless payments for convenience and speed, but says more education is required around the potential risks.
“With all the contactless chip emissions, there is an opportunity for people to attempt to hijack the signals and skim bank cards,” says Mr Pollard, 40.
“There is a buffer area where you can point your card and still make the payment, which opens up a question of security of your card, and the RFID chips signal.
“This is a big worry for me and one that has led me to be proactive.”
During a pre-COVID trip to China, Mr Pollard noticed several card holders whose cards were kept in small sleeves, which he soon discovered were designed to protect cards from hackers or skimmers.
I purchased a couple of sets of these to make sure I was protected, or at least making it harder for a potential thief,” he says.
“To this day I still have my protective sleeve and hold my bank cards to make sure I am doing what I can to be safe.
“No matter how smart I think I am there is always someone out there smarter than myself.”
Though slightly more reluctant, 72-year-old Di Grant says she’s also comfortable saying goodbye to the magnetic strip.
She’d prefer to stay away from contactless payments though, opting to insert and enter a pin wherever possible.
“I’m not impressed with tap-and-go,” she says.
“One reason being that if you lose your card and don’t notify the bank ASAP, then someone could find the card, and use it for purchases until the notification occurs.”
Having been the victim of a hacker during an overseas holiday, Ms Grant believes the less contact we have when making payments, the higher the chances are of being hacked.
“One of the things that bothers me significantly about digital payments is the possibility of being hacked, although this risk is usually denied by the experts.”
It’s something we’re all going to have to get used to though, with an increasing number of payment providers expected to follow the contactless trend.
Next cab off the rank was Afterpay, who announced its intention to phase out barcodes for in-store payments.
From September 30, customers will need to use the digital Afterpay Card – available via the Afterpay app – to complete purchases in-store.
I am behind any advancement in technology, as long as there is information about the good and, equally, the bad that comes with these changes.
“Contactless payment is good for business and the consumer, but there also needs to be education around the risks.
Pauline is a personal finance expert at CreditCard.com.au, with 8 years in money, budgeting and property reporting under her belt. Pauline is passionate about seeing Aussies win by making their money – and their credit cards – work smarter, harder and bigger.
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