Over the years, the practice of trade is what has strengthened and fostered the economic evolution. In collaboration with technology, we have invented paperless and, most recently, contactless ways of engaging in trading to ease and fast-track our trading. But along with these advancements, fraudsters have been undergoing their own evolution – when are we safe? How can we ensure safety in our transactions?
What is a Contactless Payment Method?
This new method of payment uses radio-frequency identification (RFID), near-field communication (NFC) or Samsung Pay (MST) to engage your credit or debit card, smartphone, smart card or another device to complete a secure payment.
How Does a Contactless Payment Method Work?
Consumers are required to simply wave the chosen device over the reader at the point of sale terminal to initiate the payment process. The chip and antennae will then transfer the necessary personal and banking details to the reader. Some suppliers support this payment method wholeheartedly as the process can be twice as fast as other conventional methods of payments; the ease of transaction also often leads to customers spending more money.
What is the Level of Security on Contactless Payment Methods?
As with all payment methods, there are a few security features in place: monetary limits, transaction number limits as well as user verification. In the USA, banks are liable for any fraudulent transactions charged to contactless cards as per fraud guarantee standards. Another security feature is the floor limit set separately for each merchant encountered as well as for the card holder upon individualized risk assessment. In the USA, $25 is the lowest floor limit recorded.
Where Do The Fraudsters Fit In?
There has been a rise in the number of fraudulent transactions attempted with information obtained through contactless device skimming. Although this still only accounts for 0.5% of all card fraud annually, the risk is relative as not enough of the population take advantage of this new method of payment yet. The kit used by fraudsters can pick up your contactless card’s information from 2 – 4 inches away – a distance easily achievable in a crowded shopping mall or busy street corner. Because there is no PIN system in place, there is little other information needed before the fraudsters have access to your money.
Unfortunately, your card information isn’t the only thing fraudsters have access to. Depending on the grade of their kits, they may be able to access your personal details which they may then use to steal your identity.
How to Protect Yourself from Contactless Card Fraud
First and foremost, being vigilant at all times – not just when using contactless facilities – is important. Keep an eye out and actively avoid anything particularly suspicious. If you suspect that you have had your contactless card hacked, cutting through the top right-hand corner breaks the circuit that enables the car to send signals and information and should stop any further fraudulent action.
Some suggest wrapping your card in foil when not in use or inserting a special blocking card into your wallet. However, this would then require removal of the foil for use, defeating the purpose of a contactless card.
There are risks with every method of payment currently used and it is up to us to weigh up the risks and benefits, to remain vigilant and to protect ourselves from any fraudulent action.