Arvind Ronta
The outbreak of COVID-19 and the fear surrounding it hav brought contactless payment cards to the forefront of payment discussions. With its simple tap to pay technology, it eliminates the need of swiping or dipping your payment card at the terminal, as the card never leaves the hands of the consumer. The same technology also powers the ability to pay by phone without contact – an increasing trend in how Indians have started to pay. However, certain misconceptions regarding the security of contactless payments have been a roadblock that needs to be cleared.
Let us address some of the common myths surrounding contactless payments and the facts behind them, to help users understand that contactless payments are entirely safe.
Myth: Electronic pickpocketing: A thief standing close to you near a point of sale terminal will be able to electronically pickpocket from contactless cards.
Reality: The contactless PoS terminals are deployed to KYC-compliant merchants. If an unauthorised transaction occurs with these PoS devices, it can easily be traced and identified by the bank and legal authorities. However, for a fraudulent transaction to occur through near-field communication (NFC) enabled PoS device, the thief will need to stand merely four centimeters away from the contactless card or cardholder, which is generally not possible without raising suspicion. Further, if a consumer’s contact details are updated with her bank, she receives an immediate alert on the transaction, which can be reported to the issuer.
Myth: Stolen card credentials can be used to make purchases.
Reality: Contactless cards have multiple layers of security including an EMV chip technology, real-time fraud detection systems, just a short range within which it can be read to avoid data theft, and unique encryption which help protect the cardholder from multiple fraudulent transactions. However, in the event a contactless card is lost or stolen, the card issuing bank needs to be immediately notified to stop all future transactions through the stolen card.
Furthermore, each country has its own limit on contactless transaction amounts. In India, the limit is Rs 2,000 per transaction for contactless payments. While transactions above Rs. 2,000 now need a PIN to be entered, it is unlikely that a thief would get hold of the card as well as the PIN from the cardholder.
Myth: Increased vulnerability of personal data. A thief can get access to personal account information and steal the identity of a card holder.
Reality: Contactless payments use the same dynamic security as EMV contact chip cards. Also, the additional layers of security provided by tokenization for each transaction replaces sensitive payment account information found on payment cards, such as the 16-digit account number, expiration date and security code with a unique digital identifier which is used to process payments without exposing any actual account details. This helps prevent fraud and the cardholder’s personal information is protected at all stages of a transaction.
Myth: Card skimming; A thief can steal personal account information of a contactless cardholder at the PoS terminal and duplicate the information.
Reality: The card user always remains in control of her contactless card while making payments, therefore the security threat posed by card skimming is negligible to nil. Fraudsters are likely to gravitate away from technologies like contactless where the fraud cannot be replicated multiple times. However, be assured that transactions are monitored with real-time network monitoring and fraud detection measures. Consumers are offered these services by financial institutions and payment networks.
Contactless payments offer a secure and convenient way for consumers to transact swiftly. Consumers should be aware of these misconceptions to make an informed choice. In any case, a cardholder must be vigilant and report lost/stolen cards to her respective banks, regularly check bank account statements, keep bank SMS alerts active and notify banks immediately on unauthorized/ suspicious transactions.
Globally we have seen that as people start using contactless payment cards on a regular basis, tapping to pay not only becomes their preferred payment habit but also improves the efficiency of merchant outlets. In India, while contactless payments have turned out to be a savior for merchants involved in essential services, we are confident that it will help other merchants too once we emerge from the ongoing pandemic.
The author is Head of Products - Visa India & South Asia.
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