New Tech, New Payments

New Tech, New Payments

Payments… you know you have ‘em…

You have house or rent payments, car payments, credit card payments, maybe even a student loan payment or two. But payments don’t stop there. In our digital world of e-commerce, payments have taken on a whole new level of meaning. In recent years a new form of payment has emerged, and it can be as damaging to your financial future as those I’ve just mentioned.

What are those payments you ask… I call them “Stealth Payments”…

But, what the heck is a “stealth payment?”

Let’s take a quick look at what Webster has to say about the definition of “stealth.” There are two I’m going to focus on, the first is:

“Theft… something stolen…” hmm… actually pretty applicable here.

The second definition is:

“The act or action of proceeding furtively, secretly, or imperceptibly”…also pretty applicable.

So… what IS a “stealth payment?”

I define the term — stealth payment — as “a type of payment that is incurred almost imperceptibly because of its convenience and negligible amount, resulting in large chunks of your financial future being stolen.”

When you think of the word payments, you typically think of money coming out of your budget and being applied towards things like those payments mentioned at the beginning of this article. A payment brings to mind something done on a regular basis (usually monthly).

A stealth payment is also something that results in cash flowing out of your personal budget. But it’s not as typical as a credit card, car, or rent payment that has a due date. It’s not like making an insurance, or cell phone payment. Stealth payments are irregular, and harder to nail down because they’re seemingly small payments (less than $20) that you make not thinking of the amount because hey… it’s just a few bucks… right?

Here are a few examples:

– Amazon “1-Click” purchases (that darn Prime membership!)
– iTunes “Buy” actions (this song only costs 99 cents!)
– Cable or satellite movie rentals (that $5.99 movie rental is a lot cheaper than going to the movies — right ?)
– Purchases on Google Play
– PayPal purchases (just log in… no credit card required)
– Apple Pay or Android Pay purchases (just press the button on your phone and put it next to the device)

You get the picture…

Stealth payments are those little, almost negligible payments, you make when you purchase something on Amazon for $12 with 1-Click, or rent that movie from your cable or satellite provider. It’s those seemingly trivial payments you make that require almost no action other than the press of a button, tap on a cell phone, or click of a mouse.

In my book The Debt-FREE Millionaire, included in our SMART Wealth University, I outlined something I call an ICBM Defense System. In this case, ICBM stands for Impulsive Consumer Buying Missile, and I explain the need to create one to help you avoid making impulsive purchases that add up and impede your progress towards the financial future you know you deserve.

One of the steps to creating your own ICBM Defense System is to use cash as a point of reference when making any purchase decision. The example is, if you have $100 in cash from which you’re making a buying decision, and the item you want to purchase costs $80, the $100 point of reference can make that purchase take on a level of significance that’s absent when you use plastic. That’s because, with cash as your reference point, you easily realize your using up 80% of your intended resources. Using plastic has no point of reference (unless the charge is declined because you’ve gone over your limit or your debit account balance).

Stealth payments have the same purchase psychology. There is no point of reference, and all you have to do is click a button. Simple enough…

The problem is that these little purchases add up quickly. And as they do, what’s being stolen from you is the opportunity to use those funds for building the kind of financial future you know you want.

It’s the death by 1,000 cuts…

Do yourself a favor and take some time to review your bank account activity. You should be able to go online and do a query during any month you choose, and include transactions that are less tan $20. When you do you might be surprised at how much those so-called insignificant transactions add up to.

If you’re brave enough to do this, do me a favor and leave a comment that just says whether the amount was more or less than you thought it would be. My money is that it will be more. My hope is that it will help you identify a simple way to help you regain command over your financial future.

3 Responses to New Tech, New Payments

  1. Great article and true. For example PayPal recently refunded an annual membership charge that I did not authorize. They were supposed to credit the same card they charged but they didn’t. Although I tried to track the money trail, I couldn’t even after they told me how they applied the distributions. It’s a shell game.

  2. “It’s the death by 1,000 cuts…” This is very true, however, you are the one holding the knife. If you cannot live by a budget, you have no one to blame but yourself. I find that most people live a stealth financial life.

  3. Just went through last months spending and there was $350 of purchases that were under $20. Some were necessary of course, but it’s a good place to watch out for needless spending. God bless.

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