Tap-&-Go Investing in 2021 and Beyond

By Luke Burgess, Energy & Capital, Wednesday, September 23

The coronavirus pandemic has boosted public and corporate interest in contactless and cashless payment options.

As a result, new payment systems like Tap & Go have been popping up in retail stores faster than ever over the past few months.

Nevertheless, there are definitely some minor kinks in Tap-&-Go payment systems that need to be worked out before we can really call it “contactless.”

Tap, Touch, and Go?

On Saturday, I was standing in line at a pizza place when I noticed the guy in front of me was trying to use a Tap-&-Go card to pay for his pie.

The guy took his card out of his wallet, held it over the reader for a quick moment, and...


No sound, no beep, nothing.

I could tell just by looking at the guy that the POS terminal didn't read his card for whatever reason. So he tried again, this time holding the card over the reader a bit longer.

And again, nothing.

His whole body sort of tightened up a bit and he had a confused look on his face. A third try...

And success. With a quiet beep of the POS, he relaxed and slipped his card back in his wallet.

The cashier pushed buttons on her touch screen for a moment and then asked, “Can you put your PIN in to approve the sale?”

The guy promptly fingered his PIN into the POS terminal, grabbed his pizza, and left. Thing is, having to plug your PIN into the POS device completely defeats the purpose... if the purpose is contactless payments.

In fact, using my chip card, I actually made less contact with the POS terminal. I had to touch the terminal once, whereas the other guy touched it five times with his PIN plus hitting Enter.

Now, I have no clue why the guy's card didn't work at first or why he had to put his PIN in. It could have been a hardware error, perhaps a faulty POS terminal. It may have been some kind of software error, e.g., a communication conflict between the pizza place's internal system and the payment system. It might have been a user error — the cashier might not have been very familiar with Tap-&-Go payments. Or, perhaps, some combination of all that.

Either way, there are clearly a few kinks in the Tap-&-Go payment system that need to be worked out.

But I think that's pretty normal.

Even though Tap & Go has been used mostly by consumers in Europe for years, it's still fairly new to Americans and our systems. And there are always going to be bumps in the road with any developing technology. We can't expect perfection right off the bat.

Besides, Tap & Go does in fact work as a contactless payment system most of the time.

After the pizza place, I asked four other cashiers how often they see a problem when people use Tap & Go to pay. They all told me the exact same thing: rarely. They all said people have to retry using their Tap-&-Go cards about as often as they have to retry their chip cards. For me personally, that's less than 1% of the time.

So is Tap & Go really a contactless payment system?

Yes, when it works. And it does work most of the time.

Is it completely flawless right now?

No, not in practice.

Is it still the future of payment?

Yes, absolutely.

Here's the thing...

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You're probably not going to get much of a choice whether or not to switch over to using Tap & Go — no one is.

When I think back to first getting a chip card, I don't remember my bank asking if I wanted one. I'm pretty sure it just sent me a chip card when my old card expired and I just started using it without much thought. And I'm pretty sure now that I couldn't get a card from my bank without a chip.

The transition from swipe to dip happened pretty much without me even being aware. And I'm pretty sure it will be the same for the transition from dip to tap.

And it's going to happen much faster than you think.

Let me ask you this...

When did you first get a chip card? When was the last time you swiped your card to pay instead of inserting it?

Ten years ago?

Fifteen years ago?

Most likely it was only five years ago.

I know, I know... That doesn't sound correct. It probably feels like you've been using a chip card for several years now. It does for me at least. But no. Chip cards were widely introduced to Americans in 2015... late 2015.

"Get Ready to Dip, Not Swipe, Your Credit Cards"
— The Washington Post, September 30, 2015

"Chip Cards Will Require Users to Dip Rather Than Swipe"
— The New York Times, September 29, 2015

"Credit Cards Now Come With a Chip"
— CNBC, September 18, 2015

It's likely that in another five years, you'll feel like Tap-&-Go payment has also always been around. And you probably won't even really think to notice. I probably won't.

Tap & Go is just as much of a social change as it is in the way we make payments. It's the next small step of evolution for the world's financial organism.

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