Has the credit card had its day? Will you soon be using finger print technology or eye recognition to pay for your purchases? Experts believe that the credit card will have gone the route of the cheque within 5 years to make way for new technology. The sci-fi scenario of many films such as Minority Report could be just around the corner?
Barclays, who introduced the very first credit card in 1966, have just announced that they are pouring millions into developing ‘contactless payment technology’. The company have already developed a credit card that can be scanned without being taken out of a purse or wallet. Barclaycard’s chief executive, Antony Jenkins says of the new technology, ‘The chips on credit cards now have incredible untapped capability but the plastic around the chip limits its potential.’
He suggests taking away the plastic to create ‘endless possibilities, allowing the customer to pay by using something they are already carrying, be it a mobile, key fob or even biometrics.’ He adds, ‘It’s possible we’ll see an end to plastic in the next five to ten years with new technologies to take its place emerging now. It could turn out to be one of the shortest lived payment methods in history, going from being ubiquitous to a museum piece in the same way as the video cassette.’
However, experts in credit card fraud suggest that there are still problems to iron out. Security firm Early Warning UK’s Andrew Goodwill says, ‘There are going to be flaws and we need to ensure contactless payment technology is secure before it is rolled out to everyone.’
One way of protecting yourself from fraud is to check your credit report on a regular basis. Some companies such as Experian offer a free credit check report or you can sign up for a small fee to access your credit check reports on a regular basis. Another way of protecting yourself is to take out credit card insurance.
However, PPI (Payment Protection Insurance) is still being mis-sold in many cases say the Financial Ombudsman Service, who are handling more than 500 complaints per week. PPI car, credit card, mortgage and loan cover is commonly sold to cover payments should the borrower become unable to pay due to accident, sickness or unemployment. Nevertheless, there have been widespread criticisms from campaigners claiming it is over priced and riddled with exclusions, leading to many claims being turned down.
Meanwhile, those holidaymakers stranded abroad due to the collapse of holiday firm XL this week are more likely to get their money back if they paid by credit card in the first place. Which? suggests that travellers contact their current account provider if they have done so, saying ‘They will then attempt to recover the money for you.’ Section 75 of the Consumer Credit Act covers all purchases from £100 to £30,000.
One place not to rely on your credit card, however, is Cuba. Some holidaymakers over there are finding themselves stranded without cash after finding that many hotels, shops and even banks won’t accept their credit cards. The reason for this is the American embargo against Cuba. Many British cards such as Egg are owned by American companies and their products are not accepted in Cuba. For those worried about the prospect of a holiday with no access to cash, the UK Foreign and Commonwealth Office advice is as follows. ‘Check with your bank to confirm that your debit/credit/cash point cards will be accepted. If it cannot confirm this, bring suitable sterling or euro alternatives, preferably in the form of traveller’s cheques.’