Tap-and-go credit card coming for low value payments

Credit card company MasterCard is introducing a new system of "tap and go" payment which will mean customers do not need to physically authorise low-value transactions.

From October next year, all of the company's new cards will include a micro-chip so users can hover their card over an Eftpos terminal instead of swiping it.

For transactions lower than $80, no pin or signature will be required to authorise the payment.

More expensive purchases will still require physical permission but will also not need to be swiped through an Eftpos terminal.

MasterCard New Zealand's country manager, Albert Naffah, said thenew technology was quicker and safer than the swiping system which uses a magnetic strip on the back of a credit card.

If a person's PayPass card was stolen, any unlawful payments would be covered by MasterCard, he said.

"The transaction still needs to be authorised by the bank, so it's not like you can run away with the card and be free forever ... we think it's even more secure than what you have today," he said.

"Once it's been reported lost or stolen no transactions can be made and you are not liable for transactions you haven't done."

Mr Naffah said it was impossible for the card to accidentally pay for something if it bumped against the payment terminal.

"There's no chance of that whatsoever. You have to tap the card against the reader for it to work. The signal it uses is intentionally weak so that you can't walk past the terminal and accidentally pay for someone else's transaction.

"You've got to take your card out of your wallet and tap it against the reader.

He said the "contactless functionality" technology is similar to swipe keys which are used in offices and hotels.

The chip could also be put in other objects such as a mobile phone.

The system is in use overseas, and has been installed at Eden Park in time for the Rugby World Cup, Mr Naffah said.