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The future of retail and transit payments

Started: 2023-04-26 20:34:45

Submitted: 2023-04-26 21:34:19

Visibility: World-readable

The future is here, it's just not evenly distributed yet

This spring, when we visited London, I finally figured out everything I needed to pay for goods and services with minimal hassle.

Atrium inside the British Museum
Atrium inside the British Museum

It turns out to be surprisingly hard to get an American bank to provide a decent chip-and-PIN credit card. Most American banks provide chip-and-signature cards, which spit out slips of paper for old-fashioned wet signatures that the store clerk or waiter or whomever is taking the payment has to make a show of checking and verifying that the scribble on the paper sort of matches the smudge on the back of the card. This works but it's a hassle; for years I fixated on getting a proper chip-and-PIN card. Most banks profess to have no idea what a PIN actually is, or they make patronizing excuses about why customers don't actually want PINs. (To be somewhat fair, it's a hassle to remember a PIN if one isn't used to it, so most Americans probably don't actually want a PIN. But that doesn't explain why it's hard to find any credit card with a PIN, especially in the cards targeted at professionals and business travelers and people who ought to know enough to ask.)

The credit card I use the most is issued by Barclay, and they grudgingly provide a PIN, but the card is still signature-preferred, which means that if the credit card terminal is identified as being operated by a human clerk, the terminal falls back to asking for a signature. This turns out to be true even at self-check-out machines, where there's theoretically a human somewhere in the store who's sort of watching out for the group of self-check machines, but that stalls the check-out process while the machines summon the human who has to log into the machine and print out the slip of paper for the signature, which somehow seems like an even bigger hassle.

While I was working for Google it turned out that the corporate credit card they gave me was already chip-and-PIN by default — which meant they needed to give me a special warning that I actually did need to know my PIN in advance before traveling somewhere where I would be expected to know that PIN on demand. I finally felt like I was on the same footing as everyone else at restaurants using my chip-and-PIN card; and I couldn't help but wonder if the waiters had recognized my American accent and were prepared to go through the effort of asking me to sign the signature slip when the machine asked for my PIN instead and skipped the signature. I finally found a US bank that would give me a real chip-and-PIN card, the credit union First Tech; I don't use the card much but it's great for travelling internationally.

I very much appreciate the habit of waiters in London to take my credit card payment with a hand-held terminal at the table. It's considerably harder to skim a credit card when it never leaves my sight — especially when the waiter never even touches the card during the transaction.

(I do not appreciate the habit of waiters in London to completely abandon me after clearing my dishes before I have the check. I presume they think it's rude to ask if I want the check because then I'd feel like they were trying to hurry me along, but in practice I am not generally in the habit of lounging around the dinner table for an extended time after eating, and my spouse is anxious to leave the instant she finishes eating.)

The new hotness, though, turns out to be contactless payments, which don't need a signature or a PIN at all. The last time I was in London the limit for an individual contactless change was £30, which meant it was fine for small purchases and a single museum ticket but less useful for a family. (I noticed that even buskers on the street had contactless terminals set up to tap to give them £5.) The limit is now up to £100, which is enough for family admission to any museum and most meals. I used my contactless card most of the time, except for purchases over £100, and I never had to sign a credit card slip.

The other new hotness is mobile payments. I occasionally use Apple Pay on my phone in the US, but while I was in London it always seemed easier to use one of my credit cards.

One traditional payment method that I barely used was cash. Virtually everything took credit card payments, and it was almost always easier to pull out my card rather than fumble for cash. The one thing I paid cash for was a museum guide and map at the British Museum. I got two one-pound coins in change and used them a couple of days later to try to get the kids out the door in the morning. I offered a prize to the first kid who made it to the door, and then decided to give the same prize to each of them, so it turned out lucky that I had two coins to give away.

Liverpool Street station Elizabeth Line passage
Liverpool Street station Elizabeth Line passage

The most exciting part of the payments portion of the trip was using my contactless credit card at the faregates on the Tube. (The last time I visited London, I only had one contactless card, and I almost got stuck behind the turnstile when I tried to leave the station and the reader wouldn't scan my card.) Kiesa and I used our contactless cards in pay-as-you-go mode, with the system automatically capping our fare when we reached a one-day travelcard threshold. This meant my cognitive load of paying for transit was reduced to approximately zero: I didn't have to worry about how much I needed to pay to ride transit, or making sure I had enough money (but not too much money) on my stored-value transit card, or figuring out the right combination of all-day travelcards to buy.

(I did not attempt to use mobile payments on my phone for transit, though that was (maybe) supposed to work. Transport for London notes unhelpfully "If you use a mobile payment associated with a non-UK bank card, your card may not work," and my contactless physical card worked well enough that I didn't feel like I needed to try my phone.)

When we landed at Heathrow, I asked the station agent for a "young visitor's discount" on a spare Oyster card I brought with me for Calvin to use. This gave a 50% discount on the adult fare, but the best value available to him was a "Zip photocard". To get a photocard I had to request four weeks in advance and pick it up at a Transport for London visitor's centre so they could check the photo and birthdate against his passport to confirm he really was eligible for the age-appropriate discount. (The Tube has a complicated fare chart that charges wildly different amounts for the same person based on whether they're using contactless, Oyster, or paper tickets; for children's fares the fare chart gets even more complicated with the addition of customized photo cards.) Once we finally got the photocard for Calvin, on Tuesday of our week in London, I put £10 on the card and it lasted until we took the Tube to the airport.

Julian was free on the Tube (and would have been free on London city buses, had we ridden any), and the approved way to get him in and out of the fare gates was to find the wide turnstile at the side of the row of turnstiles, usually in front of the station agent's office where they casually kept an eye on it, and have him tailgate with me. This worked fine, but Julian was happier using his own card. I don't think it was really worth paying £15 for a custom photo card for him, but at least he got to tap himself in and out of the fare gates, and that was generally less complicated than having him tailgate with me.

Now we have photo cards for the kids that are good until Julian turns 11 (in three years) and Calvin turns 16 (in two years). Just in case we go back to London we'll be ready.

St. Paul's over the Thames at night
St. Paul's over the Thames at night