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How safe and secure are contactless payments?

Holly Thomas / 13 February 2015 ( 05 September 2018 )

Paying with a contactless card is becoming increasingly popular with those who like to pay and go but how safe are contactless payments? We bust some of the myths around paying for goods with a tap of your card.

A transaction using a credit card machine

Paying with a contactless card is becoming increasingly popular with those who like to pay and go. According to UK Finance, in the first half of 2017, £23.23 billion was spent using contactless cards, almost matching the £25 billion total for contactless spending in 2016. Figures from UK Finance for June 2017 show the average contactless purchase was £9.23. 

Instead of fishing in their purse or wallet for the right change, many are opting to simply wave their credit or debit card in front of the payment terminal and wait for the “beep” that tells you the payment has been made and you can go on your merry way.

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Are contactless payments secure?

However, there have been concerns about the safety of such a simple payment method, which, like all technology, is open to abuse.

Contactless cards use the same secure encryption technology as Chip & PIN. In 2016 contactless fraud rose to £6.9 million, according to figures from Financial Fraud Action (FFA) UK. 

Most fraud occured when a card had been stolen and a thief made purchases in the time between the theft, and the card being reported missing and then cancelled by the bank.

Read about the common mistakes which damage your credit report.

Can I claim the money back if my contactless card is compromised?

A spokesman at the UK Cards Association said: “We haven’t seen any examples of other types of fraud for contactless payments.”

Banks are required to cover customers’ losses in the event of fraud under the terms of the Banking Code. So if a card is lost or stolen, consumers are protected against fraud loss – and should report it to their card issuer as soon as possible.

Avoid these five scams to steal your identity.

To make sure cardholders pay using the right card, it's always a good idea to take the contactless card out of a wallet to touch the reader. For added protection from fraud, from time to time, cardholders will be asked to enter their PIN to verify a transaction.

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Here are the answers to some safety concerns:

Can scammers take money from you just by walking past you?

The UK Cards Association says while the contactless element stores information, there is nothing over and above what is physically printed on the card.

What if I am still worried?

You can block the signal of your contactless card by using an anti-RFID blocker. Choose from traditional purses and wallets with inbuilt protectors, credit card holders, slim metal cases or sleeves for individual cards. 

Is it true you may get charged full fare by buses that read your card but don't know you have a bus pass?

Payments can only take place where the card is placed within a few centimetres of the card reader. It is up to you to keep your cards away from card readers, if you do not mean to part with any money.

Find out how to apply for a bus pass.

What if I have several contactless cards in my wallet/purse when I tap the card reader?

It is always best to take out the card you want to pay with and tap it onto the reader. If you attempt to tap your wallet and it contains more than one contactless card, it will confuse the reader and it will not accept any payment.

Can I get a non-contactless card from my bank?

Some banks do allow you to opt-out and have a card that is not enabled for contactless payments. Check with your bank.

What if my card is stolen and I don’t notice for hours or even days?

Transactions are limited to £30, and the number of transactions that can be made in succession is limited, too. The actual number differs from bank to bank – but the idea is to stop thieves going on a shopping spree with a card. Once they reach their limit, they will be asked to enter a PIN, and any spree should come to an abrupt end.

Your consumer questions answered 

I used my contactless card in a supermarket. The cashier said the payment didn’t work and to try again. A bank statement shows I paid twice, but I don’t have a receipt. Can I get a refund?

With contactless payments, you don’t always automatically get a receipt. Go back to both the supermarket and the bank to try to get the problem resolved. Take a copy of your bank statement showing the two payments, with your account details and your full address blanked out, but be prepared to show some documentation, such as your passport, to prove your identity.

‘Your bank statement will show two of the same payments close to each other,’ says Peter Stonely, officer for civil law at the Chartered Trading Standards Institute. ‘This ought to be enough to convince any reasonable business that you have paid twice in error.’ This is a rare occurrence, but to avoid the problem arising in future, you should always ask for a receipt and check it carefully before leaving the store. 

By Hannah Jolliffe, consumer rights journalist

Read about the eight warning signs that you've been a victim of identity theft.

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The opinions expressed are those of the author and are not held by Saga unless specifically stated. The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.

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