Contactless card payments are hugely popular within the UK – in fact, they've now overtaken chip and pin payments. Contactless payments increased 30% between June 2017 and June 2018 – and 52% of all shop payments were contactless in July 2018. Overall, there were 7.4bn contactless payments in 2018.
Around 7 in 10 payments in the UK are contactless, and 17% of 25 – 34-year-olds make only one monthly payments using cash – or rely entirely on cards to make payments.
One of the reasons for the increased popularity of using contactless cards is they're easy and simple to use to pay for a variety of goods. By removing the need for a PIN code, contactless cards do offer a fast and convenient way to pay - however, they may also offer criminals the opportunity to commit fraud.
Below, we look at the facts behind contactless cards, how fraudsters can take advantage and the best ways to avoid becoming of a victim of credit card fraud.
How do contactless cards work?
Contactless cards contain both a chip and an antenna that is used to carry out the transaction. When you hold your card on or near a card reader, the retailer's card reader sends out a signal which is picked up by your card's antenna. The chip inside your card contains information about your account and by using this information, the card reader can process its payment.
Payments are currently limited to a maximum of £30 (it was previously £20), and are typically used for small retail purchases. There can sometimes be a problem with “card clash” which is when two contactless cards, either payment cards or travel cards like Transport for London's Oyster Card, both interact with a card reader at the same time.
Contactless payments are also quicker because payments are processed in batches.
How widespread is contactless card fraud?
It may seem like contactless technology allows fraudsters an easy way to access your money without a PIN. Assuming you take precautions to protect your card, the chances of it happening to you are reduced – however, consumers are right to be vigilant as cases of contactless card fraud doubled in 2018.
Because contactless technology currently limits the value of purchases, the total potential value of fraud involving these cards is reduced. Thieves are always looking for big payouts, which are limited by contactless fraud.
However, there's also been recent research that shows that the £30 maximum spend on contactless cards can be bypassed. Researchers have found that the flaws in the payments system for some contactless cards could potentially allow criminals to steal hundreds of pounds in a single transaction.
The hack the researchers used to “break” the £30 limit uses a device which intercepts the signals between the card and the card reader. It then simultaneously ‘tells' the card that no verification is needed and the card reader that verification has been provided.
Another purported method that fraudsters use is to actually process payments by standing near someone on a train or in another crowded public place and reading their contactless card through their clothes. However, according to Which?, there's little evidences that this type of fraud is common.
How to avoid and report contactless card fraud
Contactless card fraud is on the rise; in the first half of 2018, thieves stole more than £8 million from contactless fraud.
You can minimise the chances of becoming a victim of contactless fraud by following these steps:
- Don't keep your cards in easily accessible pockets or bags which will draw pickpockets' attention
- Line your wallet or cardholder with tin foil to block scamming devices from reading your card. If you don't fancy the DIY approach, there are products like RFID readers available which do the same thing
- Don't let anyone take your card out of sight while taking a payment – even for just a few seconds. They could be using a skimming device to copy data from your card's magnetic strip
- Don't give your friends your card to make payments – always make sure you're there for all transactions
- Ask for a receipt to make sure you were charged the correct amount
- Keep a close eye on bank statements and your credit report to look for any unusual activity
- Report any lost or stolen cards as quickly as possible. There is a limit on how many times you can use a contactless card before requiring a PIN, which stops criminals from carrying out a large volume of small transactions of up to £30 each – however, it's best to not wait for the card to be blocked
- Report the fraud to ActionFraud
FAQs
Don't give your friends your card to make payments – always make sure you're there for all transactions. Ask for a receipt to make sure you were charged the correct amount. Keep a close eye on bank statements and your credit report to look for any unusual activity. Report any lost or stolen cards as quickly as possible ...
How do I secure my contactless debit card? ›
5. Enable Additional Security Features. Some contactless cards offer additional security features, such as requiring a PIN for every few transactions. Check with your card issuer and enable these features to add an extra layer of protection to your contactless transactions.
Can your card be cloned using contactless? ›
Contactless Cards
Contactless payments offer increased protection against card cloning, but using them does not mean that all fraud-related problems are solved. All cards that include RFID technology also include a magnetic band and an EMV chip, so cloning risks are only partially mitigated.
Can someone steal your card info from tap to pay? ›
Your payment information is encoded, and each transaction you make with your contactless payment creates a unique one-time code, eliminating access to the data scammers attempt to steal. Should a store you have shopped at ever be victim to a cyber attack, your private card information will be safe.
Does tap to pay prevent fraud? ›
Contactless payments offer robust security measures, surpassing traditional magnetic strip cards. EMV chip technology and Dynamic Data Authentication (DDA) enhance protection against fraud. Each contactless transaction generates a unique cryptographic code, ensuring card authenticity and preventing unauthorized use.
How do I keep my contactless card safe? ›
You can minimise the chances of becoming a victim of contactless fraud by following these steps:
- Don't keep your cards in easily accessible pockets or bags which will draw pickpockets' attention.
- Line your wallet or cardholder with tin foil to block scamming devices from reading your card.
You have to be extremely close to someone for their gadget to be able to read your card. Even then, they would only get the card number and expiry date which is the same information you see by simply looking at the front of any card.
How do I stop my contactless card from being skimmed? ›
Tips to Avoid Being Skimmed
- Do a quick scan. Before using any machine, take a look to make sure it hasn't been tampered with. ...
- Be wary of non-bank ATMs. ...
- Check the keypad. ...
- Block your PIN. ...
- Use mobile wallet. ...
- Pay inside. ...
- Stay in public view. ...
- Check your account regularly.
Criminals may also be able to access your debit card information through a process called card skimming. Card skimming can happen anywhere — a shop, a restaurant, or an entertainment venue. People will utilize devices to capture card information, which they can later use to clone a card or make online purchases.
What are the dangers of contactless cards? ›
What are the dangers of contactless cards? Contactless cards carry potential risks, including unauthorized payments, card skimming, data interception, and a lack of spending monitoring. Understanding these dangers is important to protect your financial well-being.
Because contactless payments require neither PIN nor signature authorisation, lost or stolen contactless cards can be used to make fraudulent transactions.
Is contactless safer than chip? ›
Are contactless cards safer than chip cards? Contactless credit cards can also be EMV chip cards. However, contactless payments tend to be safer since the credit or debit card itself never makes contact with the payment terminal.
What is the best way to pay to avoid fraud? ›
Contactless payment options
This method utilizes tokenization to ensure that each transaction has a unique one-time use code to prevent counterfeit fraud and ensures that no customer data is part of the transaction.
Is it safer to tap or insert your debit card? ›
Because there is limited physical contact with payment terminals and cashiers, there is a reduced risk of skimming devices or malicious software stealing your card information. By minimizing physical interaction, tap to pay helps protect against card cloning, counterfeit fraud, and other forms of tampering.
How does contactless fraud work? ›
Contactless payment fraud refers to any attempt to make unauthorized purchases using information obtained by hijacking a near-field communication (NFC) -enabled transaction. Contactless payment fraud can refer to any attempt to gain cardholder account information and use it for fraudulent transactions.
How do I protect my NFC debit card? ›
How to Protect Your Contactless Card
- Avoid using odd-looking payment terminals.
- Review your account activity regularly to ensure transactions are valid.
- Report suspicious or fraudulent transactions to your card issuer immediately.
- Contact your bank or credit union promptly if your card is lost or stolen.
Because contactless payments require neither PIN nor signature authorisation, lost or stolen contactless cards can be used to make fraudulent transactions.
How can I make my debit card more secure? ›
Use these ten ways to help keep your debit card safe.
- Protect your card details and PIN. ...
- Keep a close eye on your account. ...
- Set debit card alerts and controls. ...
- Use secure ATMs. ...
- Be cautious with online transactions. ...
- Keep your physical card safe. ...
- Report lost or stolen cards immediately.
Use tap to pay or contactless pay whenever you can. These methods are usually safer because the skimmer can't grab your card info like it can when you slide or dip. This uses Near Field Communication (NFC) technology, which only works over a very short distance (a few centimeters).
