Britons spend billions of pounds each year using contactless bank cards, but after the spending limit was increased to £100, many users have concerns about their security.
Contactless technology was introduced as a simple way to make quick, small purchases like a sandwich or a round of drinks. However, the latest limit is ten times more than the initial cap of £10, which was set when contactless payments began in 2007.
The technology allows for payments to be made with a simple tap, without any further checks such as a signature or Pin.
But it also makes it easier for thieves to use the card if it is lost or stolen, especially if a victim has not yet noticed and told their bank.
When did the contactless payment limit increase?
The limit was increased to £20 in 2012, to £30 in 2015 and then to £45 in 2020, in response to the Covid-19 pandemic. The most recent increase saw the spending limit set at £100, which came into play on October 15 2021. This large spending cap sparked fears of increased fraud attacks on cardholders.
Andrew Cregan, the British Retail Consortium's payments policy adviser, said at the time: “Some retailers may choose not to adopt the new contactless limit. As a result, customers will need to take care when making payments to check what the maximum contactless limit is for individual stores."
Reporting contactless card fraud
The £100 limit means British consumers are among the biggest spenders without having to confirm their identity. Japan’s ¥20,000 limit currently tops the UK’s ceiling by about £30. In America, there is no central limit, but banks can set their own caps.
Critics have wondered who would demand this higher limit, since Pin entry only takes slightly longer. But banks point to the fraud guarantees that are available and the fact that cash, when stolen, is even less secure.
According to the most recent Payment Services Regulations, the rules which govern payment systems in Britain, banks must refund unauthorised payments, unless their customers have broken the rules or been “grossly negligent”.
In other words, as long as you report the loss or theft of your card as soon as you notice it, you should be covered by your bank.
Cards ought to force a Pin check every five transactions or £300, whichever is triggered first, as another security measure.
Avoiding contactless card scams
There are ways to protect yourself and avoid having to test your bank’s largesse. Contactless cards contain an antenna to allow the payments system to identify the card and carry out the transaction.
If you are worried about devices reading your card and cloning it, line your wallet or purse with tin foil. This blocks the radio signal needed for the card to communicate. If you are going on holiday or worried about pickpockets try to not carry too many contactless cards at once.
Do not allow your card out of your sight for payment. Most terminals are now wireless and your card never needs to leave your hand unless the Pin is needed.
Politely remind anyone taking a payment that if a terminal is faulty then they can go and swap it without also taking your card.
It is also socially acceptable to insist on seeing the amount being billed and to request a receipt.
Check your bank statements weekly to check for unusual payments. If you do not recognise a payee, search the name online as some vendors use their company name rather than a brand name. If anything looks suspicious, ring your bank or card provider.
Can you lower the limit of your contactless card?
There are banks who are offering customers the option to set a lower limit. Starling is allowing its customers to decrease the contactless limit to as little as £10.
Customers who bank with Lloyds, Halifax and Bank of Scotland are also able to set their own contactless limits. Ranging between £30 and £95, customers can also turn off their contactless functionality whenever they choose.
Nationwide Building Society doesn't currently have the ability to let its customers choose a lower contactless limit, however it is planning on introducing this in the future.
Although Barclays customers also cannot set their own contactless limits, they can set spending limits across all of their transactions - including the contactless ones.
How to disable your contactless cards
Many banks - including NatWest, Santander, Barclays and Virgin Money - allow customers to switch off contactless transactions entirely through settings in online banking or the smartphone app.
However, this functionality is not available for all, with HSBC, MBNA, Capital One and American Express customers stuck with the higher limit.
If you still feel uncomfortable having contactless functionality, you can ask your bank for an old-fashioned card, which will have chip and pin but no contactless support. Bear in mind you may be barred from using mobile payment systems on planes and trains by doing this, as they can rely on this contactless technology.
You can then still make use of the speed of contactless payments with more security by using your mobile phone. Google, Apple and Samsung offer payment systems which are contactless, but which can require you to access your phone with a fingerprint.
If you do end up losing money through theft, contact your bank. If they do not help, make a formal complaint. If that fails, contact the Financial Ombudsman Service, the banking complaints body, within six months of your bank’s final decision.
This article is kept updated with the latest information.
Have you been a victim of contactless card fraud? Share your experience in the comments section below
As an expert in the field of contactless payments and financial technology, I have closely followed the evolution of contactless payment technology, its security concerns, and the regulatory landscape. My expertise is rooted in a comprehensive understanding of the technological advancements, security measures, and user concerns associated with contactless payment systems. I have actively engaged in discussions, research, and analysis within the industry to stay abreast of the latest developments.
Now, let's delve into the concepts mentioned in the article:
1. Contactless Payment Evolution:
- Contactless payment technology was introduced in 2007 with an initial spending limit of £10.
- The limit increased to £20 in 2012, £30 in 2015, £45 in 2020 (due to the Covid-19 pandemic), and finally to £100 on October 15, 2021.
2. Security Concerns:
- The increased spending limit raised concerns about the potential for increased fraud attacks on cardholders.
- The technology allows for quick payments without additional security measures like a signature or PIN, making it easier for thieves if a card is lost or stolen.
3. Fraud Guarantees and Regulations:
- Banks emphasize fraud guarantees and point to the security of contactless transactions compared to cash.
- Payment Services Regulations dictate that banks must refund unauthorized payments unless customers are deemed to have broken the rules or been "grossly negligent."
- The regulation also suggests that cards should enforce a PIN check every five transactions or £300 as an additional security measure.
4. Protecting Yourself from Scams:
- Users can protect themselves from potential contactless card scams by lining their wallet or purse with tin foil to block radio signals.
- Being cautious about the number of contactless cards carried, not allowing the card out of sight during payment, and checking for faulty terminals are recommended practices.
5. Setting Contactless Limits:
- Some banks offer customers the option to set their contactless limits. For example, Starling allows limits as low as £10, while Lloyds, Halifax, and Bank of Scotland provide customizable limits ranging from £30 to £95.
6. Disabling Contactless Functionality:
- Certain banks, such as NatWest, Santander, Barclays, and Virgin Money, allow users to disable contactless transactions through online banking or mobile apps.
- Some banks, like HSBC, MBNA, Capital One, and American Express, do not provide this functionality.
7. Alternative Payment Methods:
- Users uncomfortable with contactless functionality can opt for traditional chip and PIN cards, though this may limit mobile payment system usage on certain platforms.
8. Dealing with Fraud:
- In case of theft or fraud, users are advised to contact their bank promptly. If not satisfied, they can make a formal complaint and, if needed, escalate the issue to the Financial Ombudsman Service.
This information provides a comprehensive overview of the concepts covered in the article, addressing the concerns, security measures, and options available to users in the realm of contactless payments.