How many times a day do we now hear the saying, “Can I tap your card?” Ten years ago if someone asked you that question, you might look at them funny, but now we listen for that beep without batting an eyelid. Not surprisingly, 1m contactless payments are made every day in Ireland. And it’s not just the convenience factor. For many consumers, it is now the cheapest way to pay.

Contactless costs

For some readers – customers of AIB, An Post, EBS and newer additions to the market, N26 and Revolut – tapping your card doesn’t cost a thing. Some KBC customers also get free contactless payments such as those that have a current account but if you have an extra current account, it’s free as long as you lodge €2,000 a month into your account.

If you are a Bank of Ireland or an Ulster Bank customer, you’re paying an extra one cent with every purchase. However, it’s the Permanent TSB customers who are really winning out when they tap their card. Those with an explore account will get 10 cent back for every purchase, whether it’s by tapping or entering your chip and pin. It’s up to a maximum of €5 a month. When you consider it, that’s 50 transactions, it’s easy to see how that fiver could end up in your pocket rather than in the bank’s account. Rates like this prove we are edging closer and closer to a cashless society.

Cheaper to chip and PIN?

The problem with contactless however, is that it doesn’t come with much security, especially when you consider the limits are set to rise again. If you are someone who prefers to enter their chip and pin, that’s well and good but it could be costing you more money.

It’s still a free service with An Post, EBS, N26 and Revolut as well as KBC’s extra current account (once you’re lodging that €2,000 monthly). But if you’re an Ulster Bank or AIB customer, you’re going from a free tap to an extra 20 cent per transaction. That could be the difference of €2.80 for a coffee versus €3. Bank of Ireland on the other hand charges 10 cent, which is half of their competitors Ulster Bank and AIB but it’s still a hefty addition.

Chip versus cash

So for bigger purchases over €30, are you better off going to the ATM and paying in cash? No not necessarily, again proving the point that cashless society, here we come. If you are an An Post customer for example, you’re going from a free contactless or chip and pin transaction to 60 cent per ATM withdrawal. In real terms, it means if your item costs you €20, it will still cost you €20 when you tap your card but if you head off to the ATM to get the cash for that item, it is essentially costing you €20.60.

AIB customers go from free contactless transactions to 35 cent per ATM withdrawal while Bank of Ireland customers are charging 25 cent. If you are someone who likes paying cash though, then Ulster Bank is the bank for you. They charge 20 cent per chip and pin and 20 cent per ATM transactions. So if you take a substantial amount out at the ATM, it will save you instead of paying for every chip and pin purchase. Again, the banks with the lowest fees are Permanent TSB, which charges nothing, and KBC’s extra account.

If you opt for the new players on the market though, they are going to charge you more on ATM fees. N26 allows you five free ATM withdrawals a month. After that though, they are charging you €2 per transaction.

So if you go to the ATM to take out €20, you’re actually being charged €22. So really, if you are a N26 customer you need to be strict and only take out money once a week

Revolut isn’t much better. You can take out up to €200 a month for free. After that, it’s 2%. So if for example, you want to take out €1,000 to pay for a big purchase, your first €200 is free but the remaining €800 will cost you €16.

If all these figures are adding up for you, and you’re thinking that on the back of this article, you’re going to start tapping some more, then we do have some security tips for you. First of all, see if you can pay by Google or Apple Pay. AIB, KBC, Ulster Bank, N26 and Revolut all offer this service and costs are the same as if you use your card. The way it works is instead of tapping with your card, you tap your smartphone which holds your digital wallet. But when the payment goes through, you have to authorise it with your fingerprint or a passcode. If you do these smartphone solutions, always ask for a receipt and if you’re at a restaurant, always ask for the card machine to be dropped down to you rather than have the waiter walk away with your important piece of plastic.

Who are the new players on the market?

N26

N26 is a German bank launched in 2015. It started as a European bank and has 3.5 million customers but is also now operating in America. It has a full European banking licence and is covered by the German Bank guarantee (up to €100,000).

So you get a bank account number, an IBAN and it operates similar to the way a mainstream bank does. This bank account really suits people that travel a lot by offering extremely competitive rates, even when purchasing items outside of the euro zone.

Revolut

Revolut is an “electronic money institution”. It is authorised in the UK by the Financial Conduct Authority under the Electronic Money Regulations. This mean that any money you deposit must be ring-fenced, so if there are any problems with Revolut, the money should be safe. It’s basically a card you sign up for. Some people will use it for going on holidays and transfer the spending money for their holidays or other people will transfer their spending money for the week or month and then use it instead of their normal debit card.

It has features that are way ahead of the traditional Irish banks. Your online statement is in real time, compared to some of the banks where you have that annoying ‘transaction pending’.

If you owe someone money and they are a Revolut customer, you can transfer them money straight away, similar to a text message rather than getting their BIC and IBAN numbers.

Also, it contains vaults where you have separate sub-sections to allow you save for Christmas or holidays or your annual car insurance bill.