The process – enabled by a technology known as Near Field Communication (NFC) – works by means of a wireless chip containing the user’s payment card details, embedded in a mobile phone (identified by the symbol shown on this page) or on a payment card. It enables users to make payments of up to a defined value at stores, cafes and other outlets simply by waving their smartphone or contactless card over a suitable card reader, without the need to physically insert their card or use a PIN. The technology can also be used to transmit advertising or information messages to NFC-equipped phones when they pass near a tagged card reader or poster in-store. NFC technology is also widely used for membership cards and physical access control.
Whilst contactless payment is fast and convenient, users are also open to potential security and safety issues.
The risks
- Unknowingly paying for somebody else’s purchase when you pass your NFC-equipped phone or card over a contactless reader when their transaction is being processed.
- Paying out of the wrong account because the card reader finds the wrong card.
- Having your financial information stolen – or your card cloned – by the wireless signal being intercepted by fraudsters.
- The information being sent by your NFC-equipped phone being corrupted or modified by a third party during transmission.
- Inability to make payments if your NFC-equipped phone battery goes flat.
- Inability to make payments if your NFC-equipped phone is lost or stolen.
- Potential inability to make payments abroad owing to lack of common standards.
- Your financial information not being properly deleted when you dispose of your NFC phone.
- Your NFC chip being wiped remotely – either in error or maliciously.
Using contactless payments safely
- If you have an NFC-enabled phone, make sure it is always locked when not in use by means of a PIN, which you should change regularly.
- Take extra care not to lose or damage your NFC-equipped phone because in effect, it is another wallet.
- Protect your contactless payment cards by investing in special sleeves or wallets so that they cannot be intercepted by others, or used by you accidentally to pay for your own or others’ purchases.
- Make sure you read and understand your bank’s terms and conditions so you are clear who holds liability in the event of an incorrect payment or security breach.
- Always check your bank statements carefully to ensure that payments have not been taken from your account without your knowledge or permission, either on purpose or accidentally.
If you have had a problem
In the first instance, contact the relevant bank or card provider.