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Contactless Cards Question & Answer

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by Sarah Orrill

29/12/10 in Card Fraud/Theft |

Card payment technology is constantly evolving to keep pace with changing lifestyles, consumer and retailer demands. Contactless cards represent a convenient new way to make paying for low-value everyday items much faster and simpler.

What are contactless cards?

Contactless is a new feature that changes the way you use your debit card. It is designed to make purchases quicker and more convenient for both retailers and shoppers on transactions of under £15. The cardholder simply holds their contactless card up to a secure card reader to make the payment, rather than entering it into a Chip and PIN machine. Payment is taken in less than a second, so when you're out and want to grab a newspaper or a quick coffee, you won't have to waste time having your card swiped and entering your PIN number.

What are the benefits of contactless cards?

  • Speeding up transaction times for small purchases
  • More convenient than carrying cash and less cumbersome to handle than lots of small change
  • Reduced queuing times in busy outlets
  • The contactless capability can be provided on standard debit or credit cards, so there's no need to carry another card around with you

Where can I use a contactless card?

Contactless card payments can be made at an increasing number of outlets, many of which have not previously accepted card payments, such as fast food restaurants, sandwich shops, coffee shops, car parks, taxi firms and vending machines. For a full list of outlets that accept contactless payments, visit http://www.paypass.com or http://www.visapaywave.co.uk.

You can quickly tell if an outlet accepts contactless card payments as it will display the internationally recognised contactless logo, known as "the ripple". Contactless cards display the same logo. 

How does contactless payment work?

To pay for goods or services under the value of £15, you simply hold your contactless card up to a special reader and the payment is automatically taken from your account.

How secure is contactless payment?

Even though a contactless payment does not usually require a PIN number to be entered, the cards are underpinned by Chip and PIN technology. That means that, from time to time, cardholders will be asked by the contactless terminal to enter their PIN. On these occasions, the user will have to complete a normal Chip and PIN transaction. This measure is designed to deter the fraudulent use of contactless cards, if they fall into the wrong hands. Every time the PIN is entered, it confirms that the card is still in the possession of its rightful owner.

What are the implications for card fraud?

The limited transaction value of £15 restricts the damage a thief can do with a stolen card. The requirement to enter your PIN number from time to time should also deter criminals. Contactless cards are more secure than carrying cash since, if your card is stolen, it will be covered by your Card Protection insurance, if you have it, so you won't be liable for transactions made by the thief.

Do all banks and card issuers offer contactless cards?

No. There is no legal requirement for card companies or banks to provide contactless payment facilities on their cards. However, an increasing number are doing so as the number of retailers accepting contactless payments increases.

Can contactless payments be made using devices other than cards, such as mobile phones?

Yes, in theory they can. In other countries, contactless payment facilities have been provided on key fobs and mobile phones. However, in the UK at present, the focus is on rolling out contactless cards.

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