As the world of technology continues to grow and change, so too does the way that we make purchases. The neatly written check that took a while to fill out gave way largely to the bank card that fits nicely in our wallets. These days, however, there’s a new method of payment that slowly seems to be gathering pace. Making a payment is now faster than ever before, thanks to the contactless payments anyone with an enabled phone, or card, can make.
Using a specific app on a handset, or a bank card that has the option included, you can now make payments of £30 and under, using the device that transmits the relevant data via an antenna. Once the data has reached the contactless terminal, it transmits the relevant information, so they purchase can take place. Even though the average payment made via a contactless transaction in the UK was just £9.06, there are worries that this method could be used to make purchases fraudulently.
RKN Global’s founder, Ronald K. Noble, reminds those who use contactless payments to be aware that this method is not completely secure, as fraudsters could steal your phone or bank card, and use the contactless feature to purchase goods.
In February 2017, £3.3439 billion was spent using contactless payment in the UK alone. This figure has increased by more than 100% when compared to February 2016, showing that more and more people are now choosing to use this method when making purchases. However, these statistics also show how many people could be vulnerable to contactless payment fraud should their phones or bank cards be stolen.
Let’s imagine for a moment that you have a bank card that allows you to make contactless payments. It would be nice to think that we all know where our cards are every minute of the day. There are, however, 92 million cards that have the contactless feature in the UK alone; some of those cards have already been stolen and fraudulently used to make purchases.
The issue is exacerbated by a too-common industry practice could mean that even if a card has been cancelled, purchases could still be made by thieves. The reason for this is that some terminals are operating offline, and do not process their purchases online, with the relevant bank, until later that day. It is thought that operating offline helps the payments to be processed more quickly, but this willingness to speed customers through the checkout that could put customers at risk. This is because when cards are used to make payments off-line, the card does not communicate with the bank. Even though the bank cancelled the card, the card has not been deactivated because it did not yet get the message, and can therefore continue to be used for fraudulent purchases.
The good news is that some cards contain a security feature that asks for a PIN after a certain number of transactions are made. However, the number of transactions that are required before a PIN is requested can differ between banks and phone companies.
Using contactless payments via your handset may be a little safer than using it via a bank card, (as you’re more likely to notice that your phone is missing!), but this does not mean that your stolen phone can’t be used for fraudulent purchases.. If your phone needs to be unlocked using a fingerprint, fraudsters still may be able to gain access, as this feature is not as secure as you may think. This could mean that after stealing your phone, the fraudster can make small purchases until your account is drained.
There are no official figures yet that tell us how many purchases were made via a stolen contactless card or phone. There were thought to have been 152,000+ stolen cards used to make purchases in 2015 alone, and many of those thefts are likely to have involved some sort of contactless payment.
Protecting yourself from falling victim to fraud is crucial, and one,albeit clunky and impractical,method may be to track each and every purchase that you make by checking your bank account every day. However, as we have already seen, some terminals operate offline, meaning fraudulent purchases can still be made whichwon’t show up on your account until they are processed later that day. This potentially means that your card or phone could be stolen at 8am, and the purchases may not show until after 10pm that same day. By this time, many purchases may have been made, leaving your bank account drained.
Ronald Noble, founder of RKN Global, urges great care in keeping bank cards and phones secure, . Preventing these items from falling into the wrong hands might very well be the best measure to avoid contactless payment fraud.