Contactless Credit Cards – High On Convenience, Low On Safety

November 8th, 2019

Contactless Credit cards are fast becoming a rage as more and more people opt for convenience over safety. The cards that result in quick payment without entering the pin saves one from long queues in shops and malls. This facility pulls people towards contactless payment cards. Statistics suggest that there are more than 58 million contactless debit and credit cards in the UK. Now, that is a whopping figure and compels one to look in detail about how these cards are such crowd pullers.

How do contactless payment cards work?

Contactless debit or credit cards have a small chip that emits radio waves. For payment, you need to hold the card near the payment terminal. The card reader that has its own electromagnetic field that gets switched on when the card enters in it. Communication between the card and its reader happens in an encrypted language. Once the card recognizes the reader, it transfers the code for payment. The reader confirms the transaction and acceptance of payment after the money transfer is done.

How safe are contactless credit cards?

There have been many cases that suggest breach of security of contactless payment methods. However, to ensure safety card issuers makes restricted use to the number of transactions that can be made before the Pin is requested. This is one of the ways to prevent loss of big amounts of money while still managing small amounts of money transfer with ease.

Also, you can pay £20 to £30 in one transaction. After four to five such transactions the reader will not allow money transfer unless one enters the pin. This way, it prevents excessive fraudulent behaviour but, still can allow theft of around £50 to £100 in one go.

Again, if you are in the vicinity of the card reader then money may get transferred without your knowledge and you may accidentally end up paying for someone else. To avoid accidental payment, keep the card at least 10 cm away from the reader. So, make sure to keep away from the card reader until it’s time to make the payment.

As per the UK Cards Association, the losses due to frauds associated with contactless cards is less than 1p per £100. Having said that it is always good to not become victim of such things.

Will my bank reimburse the money lost due to frauds occurred with contactless cards?

According to the regulations, the card providers have to reimburse victims of contactless fraud if the cardholder had taken all necessary measure to keep their cards safe. They have to prove whether the payment was authorised or negligent. If they can’t prove your fault then they have to reimburse.

It would not be an exaggeration to say that contactless payments are one step ahead in giving liberty but a little behind in ensuring security. So, it is upon the card holder to decide whether to go for these cards or not.

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