The introduction of contactless cards has been met with great success. Indeed, customers have rapidly adopted this user-friendly, time-saving payment methodSee Payment instrument. More. Nevertheless, different studies based on the spending behaviours of British consumers show that people tend to spend more moneyFrom the Latin word moneta, nickname that was given by Romans to the goddess Juno because there was a minting workshop next to her temple. Money is any item that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular region, country or socio-economic context. Its onset dates back to the origins of humanity and its physical representation has taken on very varied forms until the appearance of metal coins. The banknote, a typical representati... More when using contactless cards than other paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More instruments.
Cardholders’ monthly spending has increased by about 20% since the spending limit per contactless transaction was raised from 20£ to 30£ in the UK. Reports suggest that this rise is mainly due to recreational expenditures. During happy hour at a bar, for example, contactless card users no longer look at the payable amount before tapping their card on the reader. The spending limit was precisely introduced to avoid the risks of financial ruin, but figures demonstrate that 50% of contactless cards in the UK are credit cards, while 4 in 10 adults own less than 500£ in savings, according to the Money Advice Service.
Contactless cards might be more convenient than traditional payment methods but they create a significant risk of overspending as their users are often unaware of the exact amounts already spent. It is consumers’ responsibility to keep their finances in check, but having tools that make spending more tangible, like a handful of banknotes, can go a long way for financial stability.
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