Tap to pay: What to know about paying by phone

Use your phone instead of your wallet.

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The tap-and-go payment revolution is in full swing. It’s rare to find an eftpos terminal that doesn’t have this transaction option. However, instead of tapping your card, you also have the option of tapping your phone.

How does it work?

Apple and Google Pay (also known as Android Pay or GPay) have been in New Zealand for a few years, with Apple launching in 2016. Both payment systems store your card’s information, so you can use it to pay anywhere there’s a tap-to-pay logo.

Tap-to-pay logo
Tap-to-pay logo

The transaction is done the same as with cards: you hold your phone just above the terminal and the payment goes through. You’ll still earn any points or other perks attached to your card.

Because all your details are stored in a digital “wallet” on your phone, the system can also use them to pay for things in apps. For example, if you use Booking.com, you use the app to book your accommodation and then pay by tapping a single button on the screen (and confirming with your fingerprint or face). No having to get out your credit card and punching in your details.

The benefits

So why am I telling you to save your card details into a digital wallet on your phone, when my general security advice is to never let a website do the same thing? The answer is security.

The card information is encrypted directly to your device. On Apple, it’s kept in the same place as your fingerprint and Face ID information. Whenever you make a purchase, online or in-store, the device sends a unique encrypted number to the merchant to complete the transaction.

So even if someone intercepted the information and decoded it, they couldn’t use it, because the unique number is for that single transaction. Your credit card details are never sent.

For both online and in-store purchases, the transaction won’t go through without a fingerprint, Face ID or passcode confirmation. So you don’t need to worry about someone sneaking a payment through without your consent.

These contactless payments also make it safer to pay while travelling. Both systems are available overseas. Apple Pay is available in 26 countries. You can even set up these systems to work with transit cards in some countries (Japan is one). Currency conversion fees apply as per usual.

But what if you lose your phone? Well, it’s easier than if you lose your wallet. You can use another device to use Find My Phone and lock payments on your phone (or remotely wipe it). The cards will be removed from your phone without you needing to cancel them.

Time to drop the wallet?

It takes a shift in thinking to get used to the idea of leaving the house without your wallet. I’ve only done it on short trips to the servo so far and it feels weird.

While being wallet-free is a nice dream, the reality is we can’t go cardless just yet. Few banks have signed up for the system and not every retailer has contactless payments. Fees for contactless payments are still quite high for businesses, so some are removing the function.

Apple Pay banks and financial services

ANZ, ASB Bank, BNZ, Flight Centre Mastercard by FlexiGroup NZ, Latitude Financial Services, Q Mastercard by FlexiGroup NZ.

Google pay banks

ANZ and BNZ.

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