Clean and convenient, or “thieves’ paradise”? – Forbes Advisor UK
Buyers can now spend up to £ 100 in a single transaction using a contactless payment debit card. The increase in the limit, of £ 45, takes effect from today, October 15.
The limit of multiple transactions before a card user has to enter their PIN has also been increased from £ 130 to £ 300.
The increase has fueled fears that criminals could profit by using stolen cards to make larger purchases. One commentator described the change as a “thieves’ paradise”.
If your card is stolen and used, the lost money will be refunded to you. But there are still concerns about individuals who are at great risk of having their cards stolen – so the problem goes beyond financial damage to physical security.
You can find more information on this below, including ways to prevent fraudulent use of your card in the event of loss or theft.
Plans to increase the one-time transaction limit were announced in this year’s budget in March (there is a second 2021 budget on October 27), in part in response to concerns about hygiene issues when handling of cash during the pandemic.
Danger of money
While contactless transactions offer a fast and convenient way to pay, they can also allow criminals to commit fraud as they don’t always require authentication for payment. This means that anyone with access to a card or contactless device can have access to the connected bank account.
Fears were expressed that the higher limit without contact would only encourage theft. But there are precautions you can take to protect your money:
- regularly check your bank statements and report any unusual activity on your account to your bank and the Action Fraud fraudster police
- use an RFID-proof wallet or try to cover your wallet with aluminum foil to prevent unauthorized devices from communicating with your card
- configure your banking application to notify you when a payment has been made
- Update your contactless device software when prompted.
UK Finance, which represents the financial services industry in the UK, said people who lose their cards or whose cards are stolen should report the problem to their bank immediately. Anyone suffering damage resulting from fraud or criminal use of their card will be fully reimbursed.
Set your own limit
Industry voices have admitted that seniors are among the groups likely to be least protected against fraud.
Some banks allow their customers to set a lower contactless limit, which will not only help minimize the amount that fraudsters can potentially steal, but will also help customers better manage their spending.
Laura Suter of investment firm AJ Bell claims that the increase in the limit is a “thieves’ paradise”, allowing them to steal hundreds of pounds before the cardholder notices the card is missing. missing.
She said, “Bank chiefs point to advancements in technology helping fight fraud, as some accounts allow people to quickly freeze their cards using an app in the event of loss or theft. It works for younger or digitally savvy customers, but leaves vulnerable customers, some elderly and less digitally savvy in the cold.
“For those wary of the new £ 100 limit, a handful of banks allow people to set their own lower contactless limit. Unfortunately not many people offer it and the default will be that people automatically switch to the highest rate and have to opt for a lower limit meaning many will sleepwalking within a limit of £ 100 without realizing it. account.
Halifax, Lloyds and the Bank of Scotland will allow their customers to set their own limit between £ 30 and £ 95 on debit cards, while Starling Bank will also allow their customers to set a limit between £ 10 and £ 90 at l using its application.
HSBC, Barclaycard, American Express, Capital One and MBNA will not allow personal limits.
Are contactless payments safe?
Generally, the payment process using a contactless method is safe. As with the use of Chip & PIN, your payments are 100% protected by anti-fraud technology, which makes it difficult for fraudsters to intercept the communication between your card and a reader.
Strong Customer Authentication (SCA) offers another layer of protection, as it requires cardholders using the contactless method to sometimes be prompted for their PIN.
Your bank should contact you if they notice any unusual activity on your account.
Can someone be billed twice?
It is very unlikely that your account will be debited twice for the same purchase if you are using a contactless payment method. This is for several reasons:
- a reader will probably ask you to present a single card if it detects more than one
- contactless terminals only detect cards that are one to two inches apart, so you are unlikely to end up paying with two different cards or devices
- if you are asked to insert your card in a reader, the reader could not accept contactless payment.
However, there is a “card conflict”. That’s when you use a contactless card or Oyster card to start a Transport for London (TfL) trip, for example, and (by mistake) use another to end it.
An incomplete journey will be entered on each card and TfL will penalize you by charging the maximum price for two complete journeys.
Can someone remove the contactless feature if they don’t want it?
Banks such as Nationwide, NatWest, Barclays and Santander will now allow you to turn off the contactless feature, either by sending new cards or by disabling your card functionality.
If your bank isn’t able to do this, you can choose to use the Chip & PIN feature on your card instead, or go with a credit card that suits your needs.
If you’re worried about fraudsters stealing your card information from a distance, you can use an RFID-proof wallet or try covering a regular wallet with foil to prevent unwanted devices from interacting with your card.
Does freezing a card block all contactless payments?
Payment providers such as Amex, Mastercard, and Visa have applied a “zero floor limit” since 2017/18, which means almost all transactions require your bank’s authorization at the time of purchase.
This is automatically processed within seconds once your card is presented to a reader. Your bank will decline most payments if your account is frozen.
The exceptions are certain transit charges, toll charges, and parking payments, which require time to be calculated by the billing company.
Apple Pay, Android Pay, Samsung Pay, or other smart device-based transactions will continue to be allowed unless you follow the provider’s advice to mark your device as lost or stolen and withdraw your cards.
What is contactless payment?
Contactless technology was introduced in the UK in 2007, allowing consumers to make fast payments, from stores to public transport, simply by holding a contactless bank card near a card reader.
Contactless cards contain chips with information about your account. These use radio frequency identification (RFID) technology to emit radio waves that are read by antennas built into card readers.
The remote functionality of a contactless card provides an alternative to the chip and PIN code, which requires inserting the card into a reader and entering the personal identification number (PIN) to make a purchase.
When using contactless, the reader displays an authorization message to confirm the payment, or to invite the customer to insert or swipe the card if contactless payment is not possible, for example when the purchase exceeds the contactless transaction limit.
According to UK Finance, the number of contactless payments made in the UK increased 12% to 9.6 billion payments in 2020, accounting for more than a quarter (27%) of all UK payments.
Besides bank cards, devices such as smartphones and smartwatches are commonly used to make contactless payments, for which there is no limit other than the merchant’s payment cap. This is due to the biometric security features built into smart devices.
You can read more about all forms of contactless payment in Mark’s article here.