Chip, PIN, payWave and PayPass: everything you need to know and more

Chip, PIN, payWave and PayPass: everything you need to know and more

From swipe to tap…scribble to PIN, the way Aussie consumers pay for their goods is a-changin’. Most new credit and debit cards in Australia now come with the contactless (or tap) payment option and the decades-old credit card signature will soon be a thing of the past.

Wondering how the changes will affect your trip to the shops or the way you tip at a restaurant? Here’s a quick rundown on the changes to your plastic:

RIP credit card signatures

Avid pen-users prepare yourself! From 1 August 2014 MasterCard, Visa and AMEX transactions will no longer have the signature option, a move designed to help combat fraudulent transactions.

If you haven’t already, you will be required to select a 4-digit PIN over the phone, through Internet banking or in branch. Keep in mind, you may still have to sign for some purchases if you’re jet-setting overseas.

How do I tip at a restaurant?

Once the changes come into effect you will no longer be able to tip with a signature, instead you have the option to tip with a PIN. How it works is the staff member (who obviously provided great customer service) will enter the bill amount into the terminal and you will then enter the tip amount and authorise the total payment amount by entering your PIN.

The birth of contactless cards

For anything under $100, you also have the option to make contactless (or tap) purchases with all new Visa payWave and MasterCard PayPass credit cards that come with an embedded computer chip and radio frequency antenna. AMEX has also released a contactless card option (dubbed Contactless) for checkout readers with an American Express logo. If there is no logo you’ll have to revert to the ‘traditional’ method of swiping or inserting it into the terminal.

How does it work?

The payWave and PayPass tech sounds a bit complex but to put it simply (or try to) the embedded radio antenna transmits your card information wirelessly to the reader. All you have to do is hover your card within 4cm of the reader (Visa payWave) or tap the reader with your card (MasterCard PayPass) and you’re ready to go – no need to sign or enter a PIN.

A quirky MasterCard PayPass feature is paying by tapping the reader with the wallet your card is in. Keep in mind, if you have more than one PayPass card in your wallet, make sure you remove the specific card you’re going to pay with.

For more information on how the contactless (or tap) feature works check out Mozo’s payWave and PayPass guide here.

How secure are contactless payments?

You might be thinking, “what about transactions going through twice?”. To prevent transaction mishaps, the checkout reader creates a unique authentication code that only allows one transaction at a time. Plus, the card never leaves your hand, so you’re in total control and won’t run the risk of leaving your plastic at the counter. The technology also has secure encryption technology to protect you against skimming – when a crook uses a small device to scan your credit or debit card in your bag or wallet.

While your card could still be stolen, most credit cards provide a zero liability policy for fraudulent transactions with 100% reimbursement. Make sure you contact your financial institution as soon as you realise your card is missing, as some providers insist on immediate notification in order to get your cash back.

Can I disable the feature?

Unfortunately (to the dismay of many) there is no way to disable the payWave and PayPass contactless or tap feature on your credit or debit card. However, the MasterCard PayPass NFC-enabled mobile phone (currently in testing) will allow you to turn it on or off. If you have any more queries about contactless payments please read our payWave and PayPass credit cards answered! blog.

It will be interesting to see what the next steps in contactless payment technology are, especially with tech-forward announcements like wristband payments and the Coles PayTags. We will have to wait and see…

Do you love or hate the changes to your plastic? Let us know below!

Chip, PIN, payWave and PayPass: everything you need to know and more was last modified: June 26, 2015 by Rebeccah Elley

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10 Comments - Write a Comment

  1. now let me see a bank which will give me an option to opt out of this very dangerous technology and I will move all my accounts!

    Reply
  2. I have been sent by P & N bank a replacement eftpos card that is now a Visa debit card with Paywave.
    I refuse to activate and carry it. Totally unsecure system
    We had to stop using signatures and use pins for security reasons (that makes sense), but we are forced to have a totally unsecure system that doesn’t even require it removing from your wallet…. really!
    They will reimburse for purchases THAT YOU CAN PROVE WERE fraudulent.
    I am now looking to move my account and mortgage to any bank that will NOT force this stupid system on me. If I can’t find one I will punch a hole in the card and go back 30years to going into the bank to withdraw cash

    Reply
  3. Today I had my purse stolen and the thieves have managed to spend ALL my money in 45 minutes by shop hopping from one shop to another until all my money was gone. No money in there now for me, or my loan repayments which will now attract an overdrawn fee, rent etc. apparently over 15 days for refund and only if I can prove it.

    Reply
      1. Hi beca, do you recommend Travel Cards over standard debit cards? and do they come with contact-less payment? Specific regards to NAB, westpac, CBA. Cheers

        Reply
        1. Mozo

          Hi Maxine,

          Good questions!

          – I wouldn’t recommend one over the other, as travel prepaid cards and debit cards both have their pros and cons. If you want to lock in your exchange rate before you go overseas (or avoid having a card with “tap and go” functionality, see answer below) then a prepaid travel card could be a good option. But there are fees attached like paying the upfront purchase fee and reload fees for adding more to your balance. Whereas, with a debit card you’ll avoid these fees but take the risk of the Aussie dollar dropping, which means you may not get as much bang for your buck. I would recommend reading my blog on the different travel money cards available to help you decide: https://mozo.com.au/travel/mozo-s-travel-money-picks-what-s-the-perfect-plastic-for-you

          – I couldn’t find any mention of it on their website, so from what I can see prepaid travel cards from NAB, Westpac and CBA don’t come with “tap and go”. But before purchasing one have a look on the card just to double check it doesn’t have “paypass or “paywave” printed on the front.

          Thanks

          Rebeccah

          Reply
  4. If I could opt out of paywave chip cards I would and also change banks to do so. Some charge for old style pin transaction and cash out others charge for PAY WAVE TRANSACTION WHO WINS? NOT CARD HOLDERS.

    Reply
  5. I don’t want paywave. Once upon a time customers had choices. It takes me 5 and half seconds to swipe my card and enter my pin. If you don’t have the time to enter a pin, why are you shoppinf? designed for lazy b’s.

    Reply

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