While consumers still use cash, checks, and credit cards to pay for their everyday transactions, a new era is upon us, one in which consumers can leave their wallet, cash, and credit cards at home and pay for whatever they need with their digital wallet, cell phone or pre-paid debit card. With the emergence of these new forms of payment, banks and technology companies are jostling for their share of the $50 billion a year in fees generated through everyday transactions.
However, before jumping on the bandwagon of a new payment method, consumers should read the fine print and check the transaction costs. While most of the new electronic payment options are tied to consumers’ bank credit and debit cards, and therefore the transaction costs incurred by the consumer will be the same as they are under the consumers’ current form of payment, some costs associated with these new payment services appear to be completely hidden, with consumers unaware of the price of their payment decisions.
For example, pre-paid debit cards can be especially costly, with many cards charging fees for activating and maintaining accounts, and for transactions, balance inquires, and reloading.
Consumer Reports has cautioned consumers that “as these new forms of payment grow more popular, consumers must be careful to understand the costs, and disparities in protections associated with the promise of new convenience.” Furthermore, beyond understanding the costs and disparities of protections of these new digital payment services, consumers must also beware of unauthorized charges, billing errors, non-credited payments, or other problems, all of which often occur using non-cash payments.
If you or someone you know has been victimized by one of these new payment methods, please contact us to discuss your legal options.