November 06, 2006
Contactless Payment? Why We Still Need Hard Cash
Years ago, when the first RFID contactless payment cards made their appearance, I wrote several editorials in various local + regional weeklies about why society would always need cash. Fifteen years later, I'm of that opinion still, and more strongly than ever, especially in light of the fact that respectable researchers have shown that some of the current breed of contactless credit cards have security flaws.
Reader RFBase rightly points out that consumers are not responsible if someone else commits fraud on their cards. Cardholders may not be responsible, but that doesn't mean it might not affect their credit rating. We all know how (in)accurate credit reports have been in the past. What's more, someone pays for the cost of fraud, and that probably means that interest rates go up, or yearly card memberships do. Or both. Or the products themselves go up in price. Basically, most of the benefit of using contactless payment cards is to the technology supplier and possibly to the merchant. This seems to be a re-occurring theme in some applications of RFID: the consumer, from their point of view, gets very little extra benefit that they actually care about.
Then there's things like contactless transit passes now. What if I don't want a whole month's worth of credit? Why would I want a piece of plastic for a two-way trip, especially if I rarely use transit? Contactless payment cards, in some cases, force you to commit to a certain expected transaction amount - possible more than you intend to spend.
But these aren't the only reasons to not move to a completely cashless society. Here's a concrete example of why I don't believe in moving to a cashless society. I went shopping yesterday and a young army cadet was selling poppies for Veterans/ Memorial Day. I always donate, even when I already have several already on my person. I had less than a dollar in change, but I contributed that. Now what if we never carried cash anymore? I know that debit/ ATM cards have moved us closer to that state, but we still have cash and we can still make small donations that matter. It would be ridiculous to expect that charitable organizations should pay for the technology required so that they might still take donations in a cashless society.
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