NFH

Despite being a Brit who has never lived in the US, I have a US debit card and credit card. Although Europe has considerably overtaken the US in contactless payments, my first ever contactless card was my HSBC USA debit card and my first ever contactless payment was at McDonald's in New York in 2009. Oddly both HSBC USA and American Express USA have since renewed my previously contactless cards with non-contactless cards. In the meantime, contactless payments have taken off in a big way in the UK. I use my American Express UK contactless cards for almost everything, even for travelling on Transport for London with no need to buy any form of ticket. Since Apple Pay launched for UK-issued cards in mid-July 2015, I have been using Apple Pay instead.

In recent years, I have noticed a trend by Brits in their 20s to pay for everything with cards. This is particularly true in pubs and bars, where it has become acceptable to pay even for just one drink costing as little as £3 with a card. Contactless cards have made this even easier and faster than cash. Many pubs and bars now install card terminals on the bar to facilitate this. When paying contactlessly, neither the bar staff nor the customer need to touch the card terminal. The bar staff enter the drinks on their touchscreen, the total is displayed on the card terminal and the customer holds their contactless card or iPhone near the card terminal. The payment is completed in around 5 seconds.

Despite Apple's push for contactless payments to become mainstream in the US, it occurred to me that this very quick payment procedure might not work in the US because bar staff expect to be tipped, unlike in most countries. Therefore is the US tipping culture going to impede contactless payments from taking off in US bars? Or will contactless payments perhaps put an end to US bar staff being tipped?

DrewGzy

Tipping in the US will not go away....

It's kind of an oxymoron but the contactless payment program will have an option for a tip so that the customer can decide to leave a tip or not. The downside is that it requires the customer's signature (as opposed to the bar-staff adding the tip) and some bars don't want to impose on the whole contactless thing.

Matt340

Chile also has been starting the contactless trend, and for years now (before the pin, chip or contactless technologies) the tipping was solved by the server asking the customer if he wanted to leave the tip by card, and adding to the total purchase. If you decline, you can always leave a cash tip. I'm surprised the US doesn't follow a model like that one...

Mr. Breakfast

A lot of business owners, as well as servers, are not comfortable asking patrons how much they wish to tip.

tmiw

A lot of people in the US are actually really paranoid about contactless payments. I don't see many physical cards getting it back any time soon, if ever, due to that. Apple Pay and similar might be what gets people to use NFC because of the added confidence resulting from the required fingerprint authentication.

Kevin AA

Count me out. I prefer cash, and if not that, then a credit card (I have one with a chip and one without). Contactless cards can be literally stolen without contact, and I refuse to buy one of those stupid faraday cage wallets.

tmiw

A few things:

1. You can only read them from a few inches away without having enough equipment such that you'd look incredibly suspicious in public.
2. Even if you did read data from the card that way, it's not enough to create a new physical card. For one thing, your real name doesn't appear when the card's used wirelessly.
3. You would have the CC# and expiration though*, but online stores generally ask for the name on the card, the billing address and/or the three digit code (four if AmEx) on the back (front) and check that everything matches like it should. Most B&M stores would also be incredibly suspicious if you try to ask to manually enter the card info without a physical card if not flat out deny you.
4. Finally, you'd still not be liable for any fraud that ended up happening despite the above.

Unfortunately it appears US banks were justified in not offering contactless cards anymore, especially if they'd end up getting tons of calls to disable/remove the functionality and thus costing them more money than they'd get. I don't know if requiring the use of a phone is going to go over all that well since usage is still pretty low from what I hear.

* If the physical card's used. Apple/Android Pay and similar give out a totally different card number and expiration.

NFH

What are US consumers afraid of? In the UK, card issuers bear liability for all fraud on contactless cards. Isn't this the same in the US?

In any case, most US-issued cards are as insecure as contactless because they require no PIN for purchases, meaning that anyone stealing the card can easily use it. The introduction of "chip and signature" in the US baffles me, while the rest of the world uses chip & PIN.

tmiw

The US is hardly alone in sticking with signature for credit--a fair number of Latin American and Asian countries have done so as well.

In any case, liability isn't with the cardholder regardless of how the card's used. There have been enough inaccurate media reports about contactless though such that people think of it as unsafe altogether as long as it's on the card itself. It's why a tellingly large number of chip card FAQs from major banks specifically say that the new cards don't have it.

lhrsfo

Despite being a Brit, I own a small retailer in the the US. We have had to update our card terminals in order to comply with the new Chip rules coming in. Amazingly, there was only one machine that was authorized by our credit card company for use (a rather old-fashioned Verifone machine which did the rounds in the UK about 5 or 6 years ago at least), but it doesn't have contactless built in, and it can't deal with debit cards properly.

I am never ceased to be amazed at how backward the US banking system is in regards to payment systems - and the internet. And, it's nothing to do with fraud, as my US cards are compromised about once a year (and I don't use them very much at all), whereas my UK cards have never been compromised (touch wood), when I'm using them day in, day out.

NFH

Indeed. The thing that amazes me the most is payments between individuals instructed by online banking. In most countries, online banking asks the payer for the payee's bank account number and the bank then sends the payment electronically. In the US, online banking asks the payer instead for the payee's postal address and the bank then sends a cheque in the post to the payee! For a country that issues the world's most supranational currency, the US has a remarkably antiquated banking system.

tmiw

That doesn't sound normal at all. The places I've seen who've upgraded their hardware use the newest Verifone and Ingenico terminals that are available. They might not be enabled for EMV yet but that's a different issue.