Contactless payments: analysing convenience and security
A study from Barclaycard has found that 75% of the surveyed retailers reported an increase of 30% in payment transactions since introducing contactless payments into their shops. This growth has resulted in over half of the merchants wanting to increase the transaction limit, currently at £30.
One in five retailers think the limit should be increased to £100.
Contactless payments have indeed been very successful in Britain. Today, 6 out 10 Britons use contactless, and Barclaycard believes contactless transactions will grow 300% by 2021.
“As the old adage goes, ‘time is money’ and since introducing contactless to the UK 10 years ago, we’ve seen Britons embrace the technology in their droves. And with speed, security and convenience all being so important for shoppers, it’s not surprising that contactless is quickly becoming the most popular way to pay.” Said Tami Hargreaves, Director of Innovation at Barclaycard.
Nevertheless, many customers wonder how much security they are giving up for convenience.
Figures from Financial Fraud Action UK (FFA) reported an increase of 150% in fraudulent operations of contactless card and mobile payments in 2016. There was a jump from £2.8 million fraudulent spending in 2015 to nearly £7million in 2016.
Most of this figure accounts for stolen data, but it is important that retailers also keep security procedures in mind to ensure that they do not fall victim to a fraudulent purchase and incur a loss.
A security flaw which can affect merchants significantly can be identified when businesses are processing payments offline.
When a contactless payment is processed online, customer verification is done instantly by the card machine, meaning that if the customer does not have sufficient funds or if the card has been cancelled, it will be flagged right away.
On the other hand, if a transaction is completed offline, such verification will not be instant and will be piled up to be checked later, giving criminals the chance to get away – and putting merchants in a vulnerable position.
For their own safety, customers are reminded to make sure that they never hand over their card, as UK Cards Association recommends that the card should always stay in the customer’s hand.
Online payments are a valid alternative for retailers looking for reduced fraud risks whilst still offering convenience for their customers. Secure Trading offers solutions such as card store and tokenization for those merchants which feel vulnerable whilst still offering good customer service.