Pros & Cons of Contactless Payments (2024)

FAQs

What are the negatives of contactless payments? ›

Because contactless payments require neither PIN nor signature authorisation, lost or stolen contactless cards can be used to make fraudulent transactions.

Contactless payments offer robust security measures, surpassing traditional magnetic strip cards. EMV chip technology and Dynamic Data Authentication (DDA) enhance protection against fraud. Each contactless transaction generates a unique cryptographic code, ensuring card authenticity and preventing unauthorized use.

Contactless payments are secure. You enjoy the same 100% fraud protection on contactless payments as your normal Chip & PIN transactions. For security purposes, you'll occasionally be asked to enter your PIN when making a contactless payment.

Tap-to-pay is less vulnerable to credit card skimming and other types of fraud since the card itself never touches the payment terminal for a transaction. “Skimming” involves using a hidden device to read and translate credit card data when a credit card is swiped to make a purchase.

Honestly, it's nothing more than a cultural thing – that and American banks basically half-assing it. Most Americans didn't even have cards with contactless tech until the past few years, and quite a few still don't. They're still accustomed to paying via chip or swipe – and btw those innovations came late as well.

What are the dangers of contactless cards? Contactless cards carry potential risks, including unauthorized payments, card skimming, data interception, and a lack of spending monitoring. Understanding these dangers is important to protect your financial well-being.

You have to be extremely close to someone for their gadget to be able to read your card. Even then, they would only get the card number and expiry date which is the same information you see by simply looking at the front of any card.

The risk of fraud occurring during a tap-and-pay transaction is minimal. Some people purchase RFID-blocking wallets to protect their cards, but the Identity Theft Resource Center states that this is an unnecessary — and often expensive — precaution.

Contactless Cards

Contactless payments offer increased protection against card cloning, but using them does not mean that all fraud-related problems are solved. All cards that include RFID technology also include a magnetic band and an EMV chip, so cloning risks are only partially mitigated.

Use tap to pay or contactless pay whenever you can. These methods are usually safer because the skimmer can't grab your card info like it can when you slide or dip. This uses Near Field Communication (NFC) technology, which only works over a very short distance (a few centimeters).

How can I stop my contactless card from being scanned? ›

Line your wallet or cardholder with tin foil to block scamming devices from reading your card. If you don't fancy the DIY approach, there are products like RFID readers available which do the same thing. Don't let anyone take your card out of sight while taking a payment – even for just a few seconds.

Google Pay is one of the tap to pay payment integration and one of the best contactless payment apps for Android.

Unfortunately, there are some drawbacks, or at least concerns, with contactless payment methods. Fraudsters are working to steal payment data and other valuable bits of info. Lost or stolen devices, meanwhile, could lead to unauthorized purchases and thus chargebacks and other issues.

Experts consider contactless payment methods with a credit card in a digital wallet as the safest course of action when paying at a card reader, as tap-to-pay methods are notoriously more difficult to skim than physical credit card insertions or swipes.

A thief can simply scan and relay your contactless card and obtain the digital token it uses to authorize transactions. The skimmer then sends the digital token to another phone, which can be used to make contactless payments in amounts greater than the limit.

One of the most significant NFC security risks is eavesdropping, where a malicious actor intercepts the data exchanged between two NFC-enabled devices. This can occur when an attacker places a rogue NFC reader in close proximity to a legitimate device, capturing sensitive information without the user's knowledge.

Solution: Try cleaning your card with a soft cloth or tissue and try again. If that doesn't work, try inserting the card into the terminal and entering your PIN number. If the problem persists, contact your card issuer for assistance.

Loss or theft: the main risk involving contactless payment is the loss or theft of a card. After all, someone up to mischief could use it to make purchases without any need for a PIN.

Contactless credit cards are currently among the safest forms of payment. It's incredibly difficult for a hacker to recreate the one-time code that contactless credit cards create for each transaction. Compared to magnetic strips that are more easily duplicated, contactless credit cards are much more secure.