New technology can be exciting. It’s meant to save us time and make life easier but when it comes to making sure this technology is safe it’s good to learn as much as you can before you simply jump on board.
Take for example the new “contactless” payment technology offered by Visa payWave and MasterCard payPasscards. How do they work and are they safe?
wave and go
Contactless payment technology has been in use commercially since 2005 in the US and is now being offered in Australia as a convenient and quick way to process credit card transactions for low-cost items.
It uses radio frequency identification (RFID) technology which allows cardholders to simply wave their card in front of special terminals without having to swipe or insert the card into an EFTPOS device. Transactions up to a certain limit – $100 in Australia – can then be completed without the need for a signature or a PIN. Contactless cards have a distinctive mark with a tiny antenna embedded into the chip that transmits payment instructions to and from a specially adapted card terminal.
When a retailer displays the contactless symbol at the checkout, you can pay by holding your card within 4cm of the secure contactless reader. When the four green lights appear, you move your card away and the transaction will be complete. You also have the option of getting a receipt. Or if you prefer, these same cards can still be used in the more traditional manner when paying for purchases.
are they safe?
Terminals are designed to make only one transaction per card at a time – each transaction must be complete or void before another one can be processed. It is also impossible to buy an item accidently by moving too close to a reader because the retailer must first enter the amount for you to approve.
For those concerned about the security of these cards, contactless cards use the same chip and PIN network as normal credit and debit card transactions. There is a payment limit on single transactions, and contactless cards are restricted to a limited number of times before customers are asked for their PIN. The upside is that you never have to give your card to anyone, retaining control over it at all times.
The biggest problem is that if you lose your contactless card anyone can use it up to the daily limit of $100. However, these transactions have the same fraud guarantee as standard transactions. So when using a VisapayWave or MasterCard PayPass card, you are protected by the issuer’s Zero Liability policy, which is their guarantee that you will not be held responsible for fraudulent charges made with your card.
If you’re not comfortable with this technology, make sure you tell your financial institution that you don’t want the contactless card before your debit or credit card is renewed. The traditional cards are still available.