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Will invisible payments lead us into debt?

Kelly Dilworth

Retailers and payment companies are coming up with increasingly creative ways to make credit card payments all-but-invisible, causing analysts to speculate that we may soon be entering a world where physical cards and other cumbersome payment tools are a thing of the past.

But as retailers salivate over the prospect of increased sales thanks to easy, frictionless payments, I’m beginning to worry that we may one day come to regret our ongoing slide toward a cashless and cardless society. Do we really want to make it easier for consumers like me – who already have a hard time resisting impulse purchases – to thoughtlessly overspend?

As my colleague Brady Porche wrote in his recent “Will credit cards go the way of CDs?” blog post about mobile payments, “The concept of the credit card is not going away – consumers and businesses depend on cards to manage their finances, and banks and issuers use them to generate profit. Plastic and metal manifestations of credit cards, however, could someday grow scarce as more consumers pay with virtual cards stored in their mobile wallets.”

Recent payment innovations, such as one-click online payments, voice-activated orders to virtual personal assistants, hands-free apps and stores that let you walk out with merchandise without ever visiting a cash register, also pose a threat to physical cards and cash.

“It’s not hard to imagine more radical scenarios, like the ability to simply walk into a store, take what you want and leave without having to worry about the entire payment process,” wrote Wired’s Klint Finley in an article about Visa’s attempt to facilitate invisible payments.

The nice thing about handing over cash or a physical card to a cashier or methodically entering your card details online is that it makes you pause for a moment before you authorize a purchase. Cash is especially useful in this way. Research has found that paying with cash is physically and emotionally painful and harder to do impulsively than paying with a plastic (or metal) card.

Credit cards, on the other hand, tend to be easier and more convenient to use and often tempt people into overspending. But paying with a physical card at least makes you spend some time connecting your purchase to the payment you are making – especially if you’re forced to use a chip card and wait several extra seconds for an EMV reader to accept your card.

Instant payments, by contrast, make the process of paying so seamless that it can feel like you’re walking away with an item for free. I had to disable one-click ordering on my Amazon account because of this. Too often, I’d get swept up in mindlessly clicking “Buy now” on multiple purchases without spending much time, if any, considering how much I was actually spending.

There were even times when I’d purchase things on Amazon without even glancing at their prices – something I would never do in a physical store.

The recent introduction of artificially intelligent virtual assistants that allow you to make voice-activated purchases within seconds has made this problem even more pressing. Now, if you want to order something, you can order it without even moving a finger.

Ordering by voice is so easy that even a toddler can do it. When I recently visited my parents, they started getting nervous when my toddler figured how to use Amazon’s Alexa and began talking to the device directly. They had heard about the 6-year-old from Texas who bought a $160 dollhouse with Alexa and were afraid that my 2-year-old would accidentally purchase something.

Another problem with the latest generation of invisible payment tools is that they make it less likely that you’ll use coupons or shop around for better deals. For example, Amazon has begun selling Dash buttons that you can fasten to your wall and click when you need to refill a favorite item. But the buttons are all linked to specific brands, so you’re basically stuck with that brand’s pricing.

As someone who normally jumps at anything that seems more convenient, I get the appeal of instant, frictionless payments. But use these new, futuristic tools at your own peril.

If you’re like me and have trouble reining in your purchases, there’s something to be said for making your payments as difficult as possible. The more you think about your purchases, the less likely you are to buy something you’ll never need.

See related: One-click shopping lures sleepy mom into overspending, Voice assistants begin to answer credit questions

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