Contactless payments are super convenient, but do you know what your bank is charging you every time you hear that beep?
Recent research by BOI Payment Acceptance found that 57% of Irish consumers now use contactless at least once a week, with many saying that they would love to see the €30 limit, which was introduced in the 2016 Budget, increased further.
According to the findings, the main reason people love contactless is because it’s quick, but interestingly, many also cited low bank charges as another advantage. But are contactless fees actually low?
Contactless fees, bank by bank
Let's start with Permanent TSB. The bank doesn't charge anything for contactless payments and will even pay 10 cent back every time you use contactless (up to a maximum of €5 per month) if you're an Explore Account customer.
KBC and Ulster Bank also charge absolutely nothing for contactless transactions. If you have a current account with one of these banks, you will only be charged for what you’re actually buying whenever you ‘tap and go’.
Contactless payments are free with AIB too, but only until February 24th 2017*. After this, each transaction will cost 20 cent in fees.
So, if you’re in the habit of paying for a €2 flat white by contactless every morning, you will actually end up paying €2.20 in total from late February. That’s a 10% premium!
Is convenience worth that much to you? Maybe it is, but others might be better off keeping a few coins floating in their pocket for small purchases like this.
Finally, Bank of Ireland charges 1 cent for every contactless transaction and have no stated plans on changing this.
We’ve been heading towards a cashless society for some time and contactless payments have shifted us further along that path, but could a cardless society soon be on the way too?
Well, perhaps, thanks to the recent arrival of Android Pay on Irish shores.
The app allows you to simply tap your phone to a card terminal to pay for items and is currently available to AIB and KBC customers who have an Android phone. It’s a similar experience to paying by contactless but, with Android Pay, you can pay for items over €30 as long as you unlock your phone before doing so.
AIB and KBC charge the same fees for Android Pay as they currently do for contactless. So, it’s free for now, but AIB will charge 20 cent per transaction from February 24th* and KBC “retain the discretion to charge” in the future, according to their Terms and Conditions.
The cost of convenience
Contactless payments have surged to popularity in recent years and are certainly here to stay. The convenience of not having to carry cash or to type in a PIN number when you’re in a rush is certainly worth a lot to many people.
However, it’s important to know what you’re being charged every time you ‘tap and go’ so you can truly understand the price you’re paying for that convenience.
*Note: January 23rd 2017 - AIB has announced that it intends to extend the fee-free contactless payments period beyond February 24th