How to Prevent Contactless Payment Scam
The payment system has evolved so money can be transferred by simply tapping a card against a point-of-sale terminal.
Very few transactions these days involve physical cash. And payment is made at the blink of an eye.
The contactless payment system has many advantages both for the traders and consumers – it’s easier, faster and more convenient.
But along with advantages come risks too.
As we all know that exchange of information through internet or IoT devices are vulnerable to various types of attacks.
They provide a good opportunity for the criminals to commit fraudulent activities if it is not used safely and securely.
What exactly is a contactless payment?
Contactless payments are transactions done without any physical contact between a customer’s payment mode to a point-of-sale (POS) terminal.
In contactless technology, the two protocols used are radio frequency (RF) or near-field-communication (NFC) protocols.
These protocols allows the card and POS device to ‘talk’ and complete a payment transaction.
The credit or debit card has a chip and antenna that communicates with a contactless POS reader.
When your card is placed closely to the POS device, the antenna activates a radio connection that allows an exchange of transaction information between the trader and your bank.
The payment methods are not just limited to cards as there are other options like payment using wearable devices like smartwatch or using smart phones e-wallets to make payments.
Contactless technology available in smartphones enable users to make payment without even using cards by setting up Apple Pay or Google Pay.
The usage of contactless cards makes day to day shopping transactions much easier.
Security Features of a Contactless Payment Card
If contactless payment systems makes transferring of funds easier when shopping, it also makes it easier for someone to steal your money.
Contactless payment frauds happen frequently and the criminals are finding ways to take advantage of this method.
The contactless cards have improved security features with several layers of protection established to minimize the risks.
Here’s the multiple layers of protection that’s included:
Europay, Mastercard, Visa (EMV) global standard
Banks have opted for the global standard called EMV to improve the security.
The EMV standard was created by Europay, Mastercard and Visa and it makes forging cards very difficult.
This standard is accepted worldwide and the new generation card has been issued which has microchip embedded in it to authenticate the chip-card transactions.
All the information of the user is saved and protected.
Unique transaction data
The contactless payment methods are secured by enabling a unique transaction code for each payment processed.
A unique encrypted code is given for each purchase and it does not contain any details of the user.
When the cardholder and the POS reader makes a secure connection, the information is concealed to prevent the bank details and user details from being acquired.
The code can be used only once and cannot be used for any other transactions.
By using the unique transaction data, the card issuers have a powerful fraud detection system which will reject any other transaction attempt made using the same code.
If someone tries to do so, the attempt will be rejected automatically.
Confidential cardholder information
Since the details of the card owner is not necessary for any transaction, any such details are not found in the physical microchip embedded into the card.
So, the user need not be afraid of their data being used for making online purchases because the cardholder name has to be provided for making any transactions.
Having all the above-mentioned safety protocols ensures your information is secure and those who like to enable an additional layer of security can opt for tokenization.
In this case the primary account number will be replaced by an encrypted number.
While making any transactions the cardholders’ details are not sent, instead a token is sent consisting of 13 to 19 characters.
The tokens use unique codes and so it makes it impossible for someone who manages to get access to the token to use it for any other transaction.
Tokenization is becoming more popular as it enhances EMV thereby providing optimum security for making online and mobile purchases.
So what can you do to prevent this scam happening to you?
7 Ways To Protect Against Contactless Payment Scams
Some of the tips which the users can adopt to keep themselves safe from contactless frauds are
- Use an RFID wallet to keep the cards so that the communication between the card and scanning devices are blocked when not using.
- Always keep your NFC equipped smartphones locked by using a PIN. Using apps like Apple Pay and Google Wallet which provides extra level of security during transactions.
- Keep your card always with you and never hand over it to someone else while paying using a contactless card machine.
- Ask for the receipts whenever you make a transaction.
- In case of theft of your cards, report it immediately to your bank.
- Check the account balances and bank statements regularly to find any doubtful transactions or payments not made by you.
- You will never get call from a bank asking for your card details claiming to be a security check. So never respond to such calls as it might be some fraudster trying to get your card details.