Online shopping changes could lead to more impulse buys

Mastercard is set to make changes to ecommerce transactions that will make online payments faster.

The card network is introducing a token system, issuing customers with a code when they input their card details, which can be used to make future payments.

This means they would no longer have to type out the long 16-digit number on their debit or credit card every time they pay for something online. Instead, customers would be able to buy items with one click.

Mastercard have already been using this payment method for about 25% of their online payments since 2014. The goal is to roll out tokenisation across all payments by 2030.

Other companies have also started using a tokenised system – Visa Inc were the first to launch the payment method in the United States in 2014. This has since been introduced in the UK.

Mastercard say advances in payment methods are “founded on the principle of enhancing security”.

Valerie Nowak, executive vice president of product and innovation at Mastercard Europe, told the Sun there had been “reduced rates of fraud” as tokenisation gains momentum across Europe.

“We are confident that reaching this vision by 2030 is a win-win-win for shoppers, retailers and the card issuers alike,” she said.  

More impulse spending

But there are worries reducing the steps needed to purchase a product could lead to more impulse buys.

Sarah Coles, head of personal finance at Hargreaves Lansdown, told the Sun that removing the inconvenience of typing out your long card number could make it easier for people to buy things they don’t need.

“The potential fly in the ointment is that it makes shopping too easy.”

Free debt advice

Our external relations director here at Money Wellness, Sebrina McCullough, said:

“With online payments getting quicker and simpler, and options like buy now pay later becoming more commonplace, it’s so easy to spend these days. And this can sometimes lead to people making spur-of-the-moment purchases they can’t necessarily afford.

“But, if you’ve got into a mess with your money, there’s help available. Don’t struggle on alone. If you can’t keep up with your repayments, get free debt advice from a service like Money Wellness. The sooner, the better.”