Contactless Payments: The Alarming Rise of Frictionless Spending

Have you ever left the house to do errands and forgotten your wallet? Or maybe you just got your nails done and don’t want to dig through your purse to find your card? Thank goodness for contactless payments, right? With the click of a few buttons, you can easily pay for what you need using just your phone. 

I have to admit, it took me about 5 years to get on the Apple Pay train: I was suspicious of the company having my credit card information, and the idea of contactless payment creeped me out. (Keep in mind, when Apple Pay emerged in 2014, we were still swiping our cards to pay – tap-to-pay didn’t exist yet.) Now that Apple Pay has been around for over 10 years, I find myself using it pretty often, especially when I don’t want to carry my wallet or when I want to leave my credit card in a safe place.

There’s something to be said, though, for how deceptively easy contactless payment systems like Apple Pay make it for me to spend money. While I’m aware I’m spending money, it’s so much easier and more convenient than counting cash. When I was traveling in Turkey recently, as I also discussed in my recent article on international shopping norms, I used cash quite often. As such, it made it easier to keep a mental note of how much I’d spent and how much I had left.

In honor of Halloween coming up soon, we are going to dive into contactless payments and how they’re turning us into money-spending zombies.

An Evolving History of Payment Methods

Era	Invention	Location
600 B.C.	Standardized and certified coins	Modern-day Turkey
997-1022 C.E.	Paper money	China
1600s	Banknotes	England
1950s	Credit cards	United States
2014	Apple Pay	United States

Standardized and Certified Coins

First, let’s start with a brief history of payment systems. In ancient times, people used items such as cows, cowrie shells, and large stones as payment. Subsequently, people began using metals to create coins; however, the weights of these metals varied widely, adding time and variability to transactions. 

One of the first documented uses of standardized, certified coins emerged in the Anatolian kingdom of Lydia, in what is now western Turkey, around 600 B.C. Stamping metal with a design increased buyers’ and sellers’ confidence and enabled merchants to get rid of their intricate weighing systems. However, it isn’t the “stamping” itself that boosted trust; in fact, acceptance probably grew over time. 

It wasn’t until communities reached an agreement on the stamp’s meaning that its usage grew. In fact, these coins emulated the three essential components of a coin, according to Isidore of Seville, a 1st-century philosopher and archbishop. A thousand years later, in 625, he wrote in Etymologiae that “in coins three things are necessary: metal, images and weight; if any of these is lacking it is not a coin.”

Paper Money

Paper is widely believed to have originated in China, with archaeological evidence suggesting it emerged in the 2nd century B.C in a primitive form. Over the centuries, the Chinese experimented with sizes, printing techniques, and types of ink, so it’s not surprising that they were the first culture to invent paper money. Experts believe that paper money emerged between 997 and 1022 C.E., during the reign of Emperor Zhenzong. 

It took a few centuries before it spread widely, which happened in the 18th and 19th centuries. Part of why it took a while to spread was that the Chinese were traditionally secretive about their papermaking skills, though, as with their silk-making process, it eventually got out.

Banknotes

In the 1600s, European banks began issuing paper “banknotes,” which could be exchanged at the bank for their full value in silver or gold coins, or used directly in place of coins for purchases. In other words, banknotes became a representative form of currency because precious metals backed them. This backing gave the new currency more credibility.

During this period, banks, rather than the government, issued money in most countries. Given the rate at which international trade was expanding, banks found it easier to use banknotes because they could mass-produce them and because they are lighter than coins when traveling.

Banknotes aren’t used much anymore, although the ones that are in use are only used by the government. The change is because, in the US, only the Federal Reserve can issue money.

Credit Cards

Even though the concept of credit has existed for a long time, credit cards didn’t exist until the 1950s. In 1950, four Americans created Diners Club. Unlike a typical modern-day credit card, a Diners Club card requires the balance to be paid in full at the end of each month. While cardholders primarily used it in restaurants, the brand’s focus has shifted to travel and entertainment expenses. It also does not have a predetermined charge limit, like most credit cards today.

In 1958, Bank of America created what we now think of as the first modern credit card: BankAmericard. Cardholders could use it at a variety of businesses, thus making it the first all-purpose charge card. BankAmericard later rebranded to Visa in 1976.

The invention of the credit card has undoubtedly made it easier to spend. Unfortunately, this ease has led to immense credit card debt: according to the federal government, Americans have $1.21 trillion in credit card debt at the end of Q2 2025. In addition, the average American has $6,473 in credit card debt. 

Unfortunately, the next invention I’m about to discuss has made it even easier to spend money and contribute to that debt!

Introduction of Contactless Payments

While it may seem like contactless payments emerged in 2014 with the introduction of Apple Pay (or maybe that’s just me), it actually goes back to the 1990s. 

In 1997, Mobil introduced SpeedPass to enable truckers to fuel more quickly and get back to the highway. By 2007, Barclaycard issued the first-ever contactless payment card in the UK, the Barclaycard One Pulse. Seven years later, in 2014, Apple Pay launched, and by the next year, Samsung Pay and Android Pay were born.

In terms of contactless payment developments in the 2020s, we’re now in the era where things are starting to get a little weird. In 2023, Amazon announced Amazon One, which allows someone to pay by simply waving their palm in front of an Amazon One device. 

What really sends me over the edge in terms of strangeness is that if you are already an Amazon Prime member, you can link your membership to Amazon One. You can apply member discounts and pay for your things, all with as much effort as it takes to cover a sneeze. Can you imagine what our ancient friends in the kingdom of Lydia would think about that?

What Are Contactless Payments?

Contactless payments follow specific parameters. They can be made using either physical cards or digital wallets and mobile apps. These transactions rely on radio-frequency identification (RFID) or near-field communication (NFC) technology to exchange data with card readers, typically within a range of 2 to 4 inches, to ensure each payment is intentional and secure.

For most consumers, the process is pretty simple. When a retailer’s payment terminal supports contactless transactions, simply holding your enabled card or mobile device near the reader completes the purchase. On the merchant side, contactless payments only work if the business invests in the correct terminals that accept them.

One such terminal is Visa’s Tap to Phone, which in 2025 reported a 200% year-over-year growth rate globally. That number was even higher in countries with the highest Tap to Phone penetration—Brazil, the UK, and the US—with a combined growth rate of 234%. What this tells me is that the demand for sellers to offer contactless payments is increasing because consumers want that ease of use everywhere they shop.

Growth on The Horizon

Market View Research, a market research firm, reported that the global market size for contactless payments was worth USD $34.55 billion in 2021. The firm expects that number to rise to USD $164.15 billion in 2030. 

What’s clear to me is that I’m not alone in enjoying how easy it is to use Apple Pay or my contactless cards, and that the trend is only growing in intensity. However, is this really the wisest way to conduct transactions? Psychological research says otherwise.

From The Perspective of Evolutionary Psychology…

For most of human history, money was not something that people carried around for purchases. Instead, people bartered, and money began as a way to record credits and debits.

If you really consider the whole history, from bartering to card and contactless payments, you will notice that our payment methods have become easier and easier, with fewer barriers. Studies indicate that people tend to spend more freely when using non-cash payment methods like credit cards or mobile apps. It’s almost as if our brains turn off and our wallets go on autopilot.

Cash is the most painful form of currency for consumers to use, with miles and rewards programs being the least painful. Thus, in descending order of pain, the payment continuum is as follows: 1) cash; 2) credit cards; 3) virtual systems such as Apple Pay or Google Wallet; 4) gift cards; and 5) miles, points, and other rewards schemes.

Contactless payments, gift cards, and reward schemes like miles and points are the most likely to be hungry for our brains, or, in other words, are the least painful payment methods. If you want to avoid turning into a money-spending zombie, research suggests we are more likely to keep track of our spending by first using cash, and second, using credit cards.

In Sum: Maintain Mindfulness When Paying

We have come a long way since stamping individual coins or printing paper money on a traditional printing block. What used to be a deliberate act, handing over cash or coins, is now a quick tap that barely registers in our brains. The result? We’ve become financial zombies, wandering through stores and checkout lines, mindlessly tapping our way into debt while our wallets quietly waste away. Luckily, using physical payment methods like cash or using a physical credit card (even if you use tap-to-pay) can help us stay mindful as we pay.

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Why has tap-to-pay taken a while to gain traction in the US? And why does it exist at all? Check out this YouTube video from The Wall Street Journal to find out.