Don't Play
Replay Replay Video Icon
Player help icon
Video settings
Video will begin in 5 seconds.
Return to video
Please Log into update your video settings
More video
Recommended Replay video
Return to video
Video settings
Please Log into update your video settings
Contactless travel: the Oyster and the Opal
London has implemented a contactless "tap and go" ticketing scheme allowing commuters to use credit cards and Apple Pay as an alternative to the Oyster card. So how easily could this come to NSW?
PT2M28S 620 349��� ���
Contactless payments could soon usurp cash as merchants weigh up its true cost.
More of us are tapping to pay and for much smaller amounts, according to a new paper published by the University of Canberra's Centre for Internet Safety.
Kingston's TwoforJoy staff member Luka Markulin and a customer using a contactless payment option. Photo: Jamila Toderas
Cybersecurity expert Nigel Phair said the number of contactless card accounts in Australia grew 42 per cent between 2014 and 2015.
Advertisement
He found just under a third (31 per cent) of tapped transactions were below $10, while more than two-thirds (67 per cent) were for under $25.
Contactless payments were found to cost nine cents less per transaction than contact payments ��� and that's without factoring in the time saved.
A contactless payment takes on average about 20 seconds whereas a contact payment takes 38 seconds, which Mr Phair said can add up.
"As a two-second change in tender time implies a $0.01 change in merchant costs, small efficiency gains or delays can make a large difference to the total resource cost of the transaction and to a merchant's bottom line," he said.
In some instances, contactless payments can even be cheaper for businesses than accepting cash.
"On a per transaction basis, cash appears relatively inexpensive compared to other payment methods and this may explain why some merchants promote the use of cash," Mr Phair said.
"However, the cost of cash is not trivial; measured as a proportion of the sales value at the average transaction size, the cost of a cash transaction is around 2.5 per cent.
There are other costs associated too, he said ��� particularly for small businesses.
"The time associated for consumers with using cash is difficult to measure, but can include, for example, the time taken to obtain cash from an ATM or branch ��� and often not knowing how much to withdraw, leading to over compensating, which may result in over-spending ��� before making a cash payment to a merchant," he said.
"Due to the extraneous time costs involved, it costs small business around four times as much per transaction to accept payments than big business.There are also hygiene factors for the food industry when preparing food then dealing with notes and coins."
For now, Canberra businesses still accept cash although more and more customers are choosing to tap and pay.
"We probably see 80 per cent card sales and 20 per cent cash sales. The transaction is super quick although the banks charge us for it which is why we charge a fee [for contactless payments]," Penny University part-owner Ellie Raymond said.
"We still see a lot of cash, usually we get a lot of $50 notes which we have to find change for," TwoForJoy supervisor Courtney Kane said.
TwoForJoy barista Luka Markulin said the convenience for their customers outweighed any additional costs.
"It's why I've got it. You don't have to sort out change, the most difficult part is splitting tables," he said.
���The report also found fears of electronic pick-pocketing were largely unfounded and the rate of fraud was actually decreasing when compared to the growing number of contactless transactions.
"For every transaction made with a contactless card, there is a discreet authentication code that changes after each transaction. Without the proper code the transaction will not be authorised," Mr Phair said.
Even if a fraudulent transaction occurs, Mr Phair said many banks and card providers offer zero liability for cards reported stolen.
But although the banks provide a safety net, he stressed the need for personal responsibility.
"People need to treat their cards like cash when they're out and about shopping," he said.