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Is Contactless Payment Really Safe?

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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless. The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each. The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand. See full bio

Last editedJan 20222 min read

Contactless payment does have risks but then so do all forms of payment, especially cash. The risks of contactless payment can be mitigated to the point where they become acceptable to most people (and most businesses). Cardholders also have the option to turn off contactless payment.

The background to contactless payment

The introduction of chip cards in 2003 was a huge leap forward in payment-card technology. Amongst its other benefits, it enabled the introduction of contactless cards in 2007. Back then, the transaction limit was £10.

Since then, that limit has been increased several times. The most recent increase took effect on 15th October 2021. It raised the amount which could be spent in a single transaction from £45 to £100.

There have been several reasons for these increases. One of them is simply inflation. As costs go up, transaction limits of all kinds generally need to be increased to keep pace with them. Another is maturity. There are two aspects to this. Firstly, if consumers like a product or service, they increase their use of it. That encourages providers to expand their offerings.

Secondly, as consumers use a product, providers learn more about how they use it. They, therefore, learn more about how to manage it effectively. Part of this, of course, means working out how to keep it safe. The last major reason is a concern for hygiene prompted by the COVID-19 pandemic.

How safe is contactless payment?

Realistically, the answer to the question “how safe is contactless payment?” is “compared to what?”. Contactless payment is safer than cash because cards can be blocked if they are stolen. If cash is stolen it is usually impossible to trace.

Contactless payment is not as safe as chip-and-pin payment (or chip-and-signature) payment because there is no cardholder verification. With that said, contactless payments have three key safeguards in place to reduce the likelihood of unauthorized use.

Firstly, there is a limit on how much can be spent per transaction. Secondly, there is a limit on how many transactions can be made without additional cardholder verification. If your contactless payments reach £300 or more, you will be asked for a PIN (or signature).

Thirdly, banks monitor card transactions, including contactless ones. If they detect unusual activity, they will request PIN (or signature) verification.

In addition to all of this, businesses and card providers will have their own security measures in place. For example, it’s now quite common for businesses to have CCTV near checkouts. This means that anyone using a stolen contactless card stands a very high chance of being identified.

This means that the differential between contactless payments and chip-and-pin payments is smaller than it might appear at first glance. Under normal circumstances, it might not be small enough to justify a limit as high as £100. Right now, however, the ongoing pandemic does favour contactless payments as they reduce the likelihood of germ transmission.

Contactless payment and financial management

Some people have expressed concerns that contactless payment is unsafe for people with poor financial-management skills. They believe that the ease of contactless payment could encourage a lack of awareness of spending.

If this is a concern for you, you can make a point of asking for a receipt for each contactless transaction you make. Alternatively, you could just photograph each contactless purchase on your phone so that you have a record of it.

Is contactless payment safe enough for you?

The decision as to whether or not contactless payment is safe enough for you is entirely personal. If you like the idea of contactless payment but are dubious about the £100 limit then you could opt for a contactless payment card with a customisable limit. There are several contactless payment card providers that offer this option.

If contactless payment really isn’t for you, then you can ask to have contactless payment turned off on your card. Most banks allow this on debit cards. Some banks allow it on credit cards.