Soon, you will need a contactless credit or debit card for mundane purchases

Ah, Andre, if it were only true. I still have one debit card that won't get a chip until it's replaced this summer. Most of the stores I go to have chip machines, but most are not yet enabled so I still have to swipe the card. We are so far behind in the US and so resistant to progress that it's embarrassing.

Just got my chip&spin debit card yesterday, leaving for Italy tomorrow. Tested the new card and it worked but I'm taking the old card along, too.

It's important to distinguish between products like Apple Pay and contactless payment. Apple Pay has superb security because it uses a digital token, and not the actual credit card number. But it requires a data connection for the phone. A contactless card obviously does not require a cell phone connection.

Why do I care? Because I have a pay-as-you-go cell plan, and often do not turn on the data for a week or more. My annual cell bill (in the U.S.) averages $100.

Apple Pay, Android Pay and credit card based NFC all use tokenised payment. So they're as secure (or not) as each other.

Android Pay requires an occasional data connection as it generates tokens in the cloud and caches them locally, but you can do ten or so offline transactions.

The credit card chip is a secure element and generates it's own tokens.

I'm pretty sure Iphones have a built in secure element so will work entirely offline but I don't have one so will now to empirical knowledge.

Apple Pay has superb security because it uses a digital token, and not
the actual credit card number. But it requires a data connection for
the phone

Not so. Apple Pay doesn't require any kind of cellular/wifi connection to work. It will work if your phone is offline or in airplane mode. It's the merchant that needs an internet connection to look up your details.

Hopefully, this time around banks in the US are not lagging the rest
of the developed World on issuing cards (credit/debit) with such
capabilities

The few US banks that did issue RFID cards over the past ten years have stop issuing cards with those chips embedded in them. They are now going with Apple/Android payment schemes instead.
My experience in Europe, especially the UK, is that any merchant that accepts RFID payment also accepts Apple Pay/Android.

Personally, I try to use either my credit cards for every purchase (here at home and overseas). I have two cards Delta Sky Miles AMEX and American Mastercard that I receive miles, also one card where I get cash rebates.

About the only place that I use cash is my local barber shop that doesn't take credit cards, so I have to take out some cash about every three months.

Overseas, it seems that I use cash more, but it depends on the country.

I know some countries like Norway and Sweden are moving to cash less, which probably won't happen in the USA, since I understand that 2/3 of American dollars are outside the US.

It is rare in the US to have to produce coins for anything. I don't like using coins. While overseas, like in Europe, sometimes you need coins to pay to use the toilet.

Michael, thank you that's wonderful news that my post is WRONG. I read it on the internet, so I was sure it was true. Maybe I will sign up for Apple Pay now.

It does raise the chance that a lost or stolen Iphone could be used to make purchases until the owner gets to a computer of some kind. But that's true of a wallet with a normal or contactless credit card in it too.

It does raise the chance that a lost or stolen Iphone could be used to
make purchases until the owner gets to a computer of some kind

Impossible. One needs to authorize the phone with a fingerprint before Apple Pay can be used. Not a big deal at brick & mortar stores. But when you use Apple Pay on the London metro it's a pain to do the authorization in the crowded conditions of most stations upon exit. Which is why I still to prefer to use the Oyster card.

Tim,
I just last week set up Android Pay on my Samsung and it required me to have a passcode on the phone (which I already did). I'll bet that's an Apple requirement too, or it would be available in settings. I don't understand why anyone would carry a phone without a passcode to unlock it for use. My Samsung has the nine little dots and you create a pattern for unlocking. It's supposed to be much more secure than the four numbers, and simple too. I have an iPhone for my work phone and the fingerprint works great on that one, but it's never worked very well on the Samsung so I stick with my pattern.
Hope this is your second good news of the day. :)

Andre,

define "tourist-oriented shops".

I just made reservation for a hotel in Germany and they included this statement in the confirmation,

"Wenn nicht anders vereinbart erfolgt die Zahlung vor Ort beim Einchecken in bar."

Per Google, this translates to,

"Unless otherwise agreed, the payment is made on the spot at check-in in cash."

"In cash", so plastic hasn't taken over everywhere.

RFID or contact-less payment with your credit card is not all that popular here in the US as of yet. Many credit cards do not even have the capabilities, and I believe one has to activate the service if your card does have the RFID chip.

More people are using their smartphones for contact-less payment, but it's still a small minority I would guess of the total population.

Given that the future of contact-less payment is likely via smartphone, I suspect US credit card companies will not invest in RFID technology.

So no, the US is not keeping up with what Europe is doing. And for sure we are no where near going to cashless systems. That will also be a challenge for US tourists in parts of Europe that are moving in that direction.

If it is going to be a cash less system, certain international tourists might just have a difficult time such as Asians, well known that Chinese tourists carry a good deal of cash. Still, it 's probably true that most of Europe will go in the cash less direction, some more , some less.

In Germany I don't think this cash less direction will take hold, I'll be glad that it doesn't take hold. The waiter/waitress wearing the coin pouch carrying a ton of coins I saw in the early 1970s can still be seen in Germany today. Depending on where I am in Germany or Austria, the type of purchase or the amount it is, I use both the credit card and cash. Should I run into the "only card " sign in Germany, I most certainly will get a picture of it, all the more so in eastern Germany. I'm not going to bet on the possibility of seeing such a sign in eastern Germany.

Andre L,

I'm not sure about other countries, but here in Canada RFID cards are very common and have been for a couple of years. All of my cards have "Tap / PayWave" capability and I find that I'm using it more and more often these days. The various card issuers set different rules on the maximum amount that can be accessed via RFID each day. My credit union has a limit of $100 per day. However I'm not sure if the "Tap" function will work in Europe, as I've never tried (I always use the C&P function when travelling).

Unfortunately not all merchants are on-board with RFID, and I routinely encounter businesses that will accept Chip & PIN cards, but will not accept Tap. They must get a lot of questions on that, as many have a "No Tap" sign taped to the POS terminal. The reason I'm given for not accepting Tap is that RFID transactions cost the merchants more in fees (ie: $1 extra per transaction).

From what I've found here, any terminal which accepts Tap will accept ApplePay and I've been using that more frequently too. All the banks are on-board with it, but unfortunately the credits unions are not. I called to enquire about that this afternoon, and a representative from my primary credit union will be calling me back tomorrow to provide further information.

Based on my experiences in Switzerland and Italy last September, some European countries appear to be further behind with phone-based payments, as neither of those countries was set-up for ApplePay at that time (I confirmed that on the Apple website), and the merchants I asked had never heard of it. That may be different now, I haven't checked.

The financial institutions always seem to be coming up with faster ways to get my money into their accounts.

Interesting as to how this will effect (Americans specifically, as I am one) credit card holders regarding the new EU regulations limiting credit card clearing fees at 0.50%. Most Americans are now carrying "Super Rewards" cards that kickback several percent cash back on all purchases. So far, the upshot seems to be that Americans cannot make credit card purchases of on-line train tickets at SBB and OEBB. American Express cards are the only cards that seem to work for these transactions, as American Express (and Diners Club) were exempted for these regulations, at least for the next two years.

Ken - for the record - we were just in NL, Belgium, Paris and London...in a lot of places we just used our pin for cc transactions, but at some we noticed the tap and go and decided to give it a try - worked every time! We tried it more towards the end of the trip thinking it wouldn't work, but no issues when we did finally try it. I think I may have even tapped when we were topping up our Oyster cards...

My new American ATM/debit card has contactless capability. Unfortunately it charges $5 + 3% for foreign transactions, so it could be used for public transit but a taxi would often be cheaper. My CapitalOne card expires this summer so hoping the new card comes with contactless capability also.

What I really would like is for my local contactless transit card be able to be used everywhere. Why is this not possible if there's an account with money on it accessible via internet?

What I really would like is for my local contactless transit card be able to be used everywhere. Why is this not possible if there's an account with money on it accessible via internet?

Such a system is possible, in fact it already exists and you already have a card! Unfortunately it charges you $5 + 3% every time you use it. A good chunk of that cost is profiteering but at least some of it goes to cover the cost of building the complex infrastructure that makes it work.

Public transport companies could recreate such an infrastructure. If they were committed to covering the cost and could all agree to worldwide interoperabilty standards. Given that the world cannot agree how to write the date I would not hold my breath.

Michael, since I've used an Oyster Card many times, could you please report whether using an alternate contactless product (I mean an RFID credit card or ApplePay) carries the same pricing/discount/daily-cost-cap attractions of the Oyster Card itself? Thanks.

The correct way to write the date is YEAR-MO-DA since files with names that start like that will be listed automatically in chronological order by a computer. Everyone knows that.

How about DA-MO-YEAR.

My new American ATM/debit card ... charges $5 + 3% for foreign
transactions,
The $5 fee is for using an out-of-system ATM, so it would not be charged for public transit tickets, but you should never use an ATM card like a credit card.

No, a computer will list files that start with that system as all the firsts of the month together, then all the seconds of the month together, etc. YEAR-MO-DA will list files automatically in a logical order. How do people file their photographs?

Michael, since I've used an Oyster Card many times, could you please
report whether using an alternate contactless product (I mean an RFID
credit card or ApplePay) carries the same
pricing/discount/daily-cost-cap attractions of the Oyster Card itself?

Same exact pricing.
Something else to be conscious of is to make sure you have enough juice in your phone for the entire journey. If dies in the the middle of the trip there will be a stiff fine.

For the millions of us with the Citi Bank VISA credit card connected with Costco, note it has contactless payment capability and is enabled. You'll see the symbol on the back of the card. You do pay a 3% foreign transaction fee if used internationally, but that may be offset given the 3% cash back on "eligible " travel charges.

Nicole,

Thanks for the feedback on the "Tap" cards. One other point to clarify - are your cards issued by a bank or a credit union? My credit union cards won't even work for POS transactions in the U.S. My bank cards usually will.

Ken...our cc's are with banks...scotiabank and bank of Montreal. So not sure if credit union would work. Of course, the worse that would happen is you'd just insert the card if the tap didn't work. We also have an Amex, but since it's acceptance is more limited overseas, we only used it once or twice.

All of my credit cards were tap/wave enabled -- ten years ago. Since then those have all been replaced first with the standard old mag stripe and most recently with the chip & PIN/signature option. None of which do the tap/wave at all. The main reason for this is lack of merchant terminals supporting this initially. In other words, the card technology got there before the card reader technology and just not enough people were able to use that function. Also, where I lived it was mostly fast food places that had the tap/wave capability and they charge an additional fee if you used it. I have asked if my current cards could be reissued with the tap/wave option and have been told that is not possible. Oh, well.

With Apple Pay and the other similar plans, the popularity of the wave technology is picking up finally in the US. I use my iPhone wherever possible to pay for things. I have not used it yet in Europe (the phone I had last time I was there was too old to support any of the tap/wave possibilities).