How safe are contactless payments?

Fears over the safety of contactless technology have escalated after it emerged that Marks and Spencer customers have had payments taken in error.

Money was taken from cards in purses that were held well away from payment terminal, according to shoppers who spoke to the BBC’s Moneybox programme. Sandwich chain Pret a Manger is reportedly investigating similar claims.

It comes after card manufacturers last year made changes to the technology to mask data, including the name, card number and expiry date, which could previously be hacked and downloaded through makeshift equipment.

Although this issue hasn't proved detrimental, a quarter of Brits still find the idea of contactless payment ‘scary’ and only 6% have made such a transaction, according to research by 

So how safe is it?

The technology allows payments to be made on a debit or credit card up to 5cm away from a reader.  The system can only be used for relatively small payments of up to £20, but a PIN is not always requested.

Approximately 5.5 million transactions now take place in the UK each month. Marks and Spencer is the largest retail adopter in the country - 20% of all contactless payments take place in its stores.

In comparison, fewer than 10 of its customers are thought to have had problems, showing that there isn't a systemic issue, according to Richard Koch, head of policy at the UK Cards Association (UKCA).

He commented: “It’s about making sure consumers understand the issues about having other contactless cards close to the payment terminal.”

Payments can only be taken when a reader is activated, which happens at the end of a transaction. At this point shoppers should make sure contactless cards not being used for payment are kept well away from the reader or could find they make inadvertent payments.

THE UKCA is now looking at ways to increase awareness of this issue.

However, if a payment is taken by accident, Koch says that retailers can solve the situation on the spot. And it’s unlikely that payments can be made without a shopper or retailer being aware, as the reader beeps and lights change when it has completed.

If a user does notice an unusual payment at a later date they should contact their card issuer to get money refunded.

The future is contactless

Whether the idea fills you with scepticism, contactless payments are steadily gaining traction in Britain and are set to become ubiquitous.

Retailers have steadily adopted the systems. Among many others, shoppers can now make contactless payments at McDonalds, Tesco, Boots and the Post Office.

Payments can be made in place of oyster cards on London buses, and by the end of the year this will be the case on all transport in the capital.

Most new bank cards are now fitted with the technology. The benefit is that transactions are faster and more convenient.

After four or five transactions a PIN is requested to prevent cases of large fraud bills if, for instance, the card is lost or stolen.