Are contactless payments safe?

credit card chip payment

writer icon Paige Whitehead     Ahmad Ardity   |   Tech     🕐 29. Jun. 2018

Contactless payment is the new popular way to pay. With its simplicity and speed, it is rapidly overtaking many other forms of payment in Europe. With fraud always a concern, users should be aware of the risks as well as the benefits of contactless payment.

What is Contactless Payment
Contactless payment is a payment method that uses communication between two devices to transfer information and make secure payments. 

Most smartphones and other payment devices use near field communication (NFC) which means that when placed close enough to each other, card and reader can communicate and make transactions. One must simply tap their contactless payment approved card or device to a reader to complete the transaction. 

There is no pin number or chip reader involved. This makes purchases quick and easy.

Card purchases have recently surpassed cash purchases, due in no small part to contactless pay. While cashless appears to be the way the world is heading, are creators and consumers being mindful of the increase in fraud technology as well?

Credit Card Fraud
With increasing advances in technology, it is not difficult to get swept up in speculation. What if someone can scan your contactless pay card just like a card reader and steal your information? What if just brushing against someone gave them your credit card details?

Electronic pickpocketing fears such as these have been around for a few years. It is true that with a radio frequency identity (RDIF) chip, it is possible to skim your credit card number from a close distance. 

Potential for theft

RDIF is like NFC in that it communicates with other devices to make a transaction. If your credit card has an RDIF chip, there is the potential for your credit card number to be stolen. The same could be suggested for cards that use NFC as well.

Many apps are available for phones and tablets to use to electronically pickpocket the public. Yet the mass level fraud that could come from this technology has not occurred. In fact, contactless pay counts for less than 2% of all card fraud.

While it is true that your card number can be skimmed electronically, much more is required to make a purchase. 

There are usually card numbers, expiration dates, security codes, and potentially other factors that go into making a credit card purchase, whether contactless or online. The credit card number without any other information is, quite frankly, useless.

Credit card companies are aware of the risks involved with contactless pay and have made several safeguards to their products to protect the public. 

Difficult to duplicate

Many contactless pay cards use unique one-time codes to make transactions that cannot be duplicated or pickpocketed. The technology to create these codes or abuse them involves very advanced encryption that is usually beyond everyday thieves.

Contactless pay also currently has a low-value purchase limit. Consumers can use contactless pay on purchases of £30 or less. 

While some cards offer higher contactless limits, they also come with more precautions such as a PIN number or fingerprint identification. This prevents electronic pickpockets from making extravagant purchases with contactless pay.

Zero liability

Zero liability is another perk several credit card companies offer. Even if you do become a victim of credit card fraud, with zero liability, the money is returned to you and you are not punished for the incident via fees. 

This makes credit card fraud less of a fear and more of an inconvenience. Many consumers can rest easy knowing that even if their card information is stolen, they are protected.

For those who would rather be safe than sorry, RDIF blocking shields for credit cards, wallets, are readily available online. They prevent RDIF readers from pickpocketing cards and offer peace of mind.

Fraud still occurs, even though credit card companies have gone to great lengths to keep consumers safe. There will always be people willing to exploit others for their own gain. 

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