08 November 2016

Why contactless payments are safe

Contactless isn’t just about cards – wearables, key fobs, mobile devices and even stickers can now be used to make faster, more convenient payments. 

Contactless has quickly grown into a popular way of making quick payments for purchases under £30, helping to cut down queues in the process.

In June 2016, nearly a fifth (18%) of total purchases were contactless, according to the UK Cards Association. That’s almost three times the 7% carried out using contactless cards during the same period last year.

The future of contactless

Contactless has already replaced cash on London buses, but where will we see it next?

Tap to give
"As we move towards a more cashless society, we’re doing work with charities so that they can start receiving donations via contactless instead of having to collect physical cash," says Richard Koch, Head of Policy at the UK Cards Association. "As well as providing safety benefits for those receiving the donations, it means that people can make a quick donation without having to search their bag for loose change."

Wearable tech
As payments become digitised, contactless is quickly being incorporated into a range of new devices.

"At Visa, we envisage that contactless technology will become a standard feature on many wearable devices by 2020," says Nick Mackie, Head of Contactless at Visa Europe. "In fact, there’s no reason why the payment function on a wearable device wouldn’t become as ubiquitous as the alarm function on a digital watch," he said. "The very essence of a wearable is its physical connection to you at any time, which by nature eliminates friction and improves security."

In fact the payment provider recently challenged students at art and design institution Central Saint Martins to come up with innovative wearable payment design concepts. Their ideas included a way to manage change digitally, categorising payments made with a simple hand gesture and integrating fashion, social media and payments into a brooch.

Three common contactless myths

Of course, there’s nothing to stop you making smaller purchases using chip and PIN, as you did before. But if warnings about digital pickpockets are putting you off, check out the truth behind the myths.

1. Contactless is less secure

"The biggest misunderstanding when it comes to contactless is that there’s something to be fearful of," says Koch. "In reality, contactless payments offer the same protection as chip and PIN," he says. "So before purchasing a protective wallet, cutting up your card – or even wrapping it in tinfoil – consider the fact that contactless fraud losses accounted for just 0.5% of all card fraud during January to June 2015."

"Despite media reports of contactless scams such as card-skimming on crowded public transport, there hasn’t actually been a confirmed case", he notes. "It is possible to do in test conditions, but in the real world anything metal would interfere with the contactless signal." That means zips, keys or other contactless cards in your bag could stop it from being read.

"Even if someone did manage to read your card, the only information that they could access would be your name and sixteen-digit card number," he stresses. "They can’t access the all-important three-digit CCV code on the back of your card which they should need to make an online transaction. And if the retailer does not ask for the CCV code, and a fraudulent transaction is made, they would be liable," he explains.

2. You can pay for something by accident

Whether you’re using a card or a mobile phone, contactless card readers only work if the device is held very close – about 4cm away. The retailer also has to approve the transaction value before the machine will accept a payment.

3. You could be charged twice

The way that the contactless payment system has been set up means that it can’t read two cards at once. "So if you inadvertently present two contactless cards rather than one then the transaction will not go through on both," says Koch. "If you’re using a contactless travel card, such as an Oyster card, it’s always a good idea to store it separately in case the machine detects your credit card instead of the season ticket that you’ve already paid for, for example."

A quick guide to contactless

Whether you choose to use your card itself, digitized card on your mobile or even a sticker, the technology that underpins your payment is the same. This Near Field Communication (NFC) technology allows data to be exchanged between devices that are just a few centimetres apart via wireless communication.

To make a contactless payment, as all you need to do is:

  1. Look out for the contactless logo. This will help you check whether your card can make a contactless payment, and also whether a retailer accepts them
  2. Check the amount is correct on the card machine
  3. Touch your card against the reader
  4. Wait for the green light and message that the transaction has been approved.

Contactless is available on all our debit and credit cards (excluding the FlexOne cash card) but we’ll leave it up to you whether you choose to take advantage of it or not. If you would prefer not to have this additional feature on your Nationwide card, you can call 0800 30 20 11 or visit us in branch.

Find out more about making contactless payments or take a look at our range of current accounts.

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