How safe are contactless cards?

By Emma Lunn

As more consumers and retailers adopt contactless payment technology, incidences of "phantom" charges and duplicate bus fare charges have increased.

Hailed as the new way to pay, there were 32.5 million of contactless cards in the UK as of May 2013 and 147,000 terminals equipped to accept them, according to the UK Cards Association.

What are contactless cards?
Contactless cards have a radio wave symbol on the front. They contain a special chip and an antenna which sends out a weak radio signal. By waving the card over a scanner next to the till you can pay for goods costing £20 or less without entering a PIN. contactless-payment

Two key issues with contactless cards have come to light over the past couple of months: bus fares and phantom charging.

Bus fares
One group of people caught out by the new technology are commuters carrying an Oyster card. Oyster cards have been around for several years, and travellers can either top up the card for pay-as-you-go use or load weekly, monthly or annual Travelcards onto them. Travelcards offer unlimited travel on trains, the tube, buses and the Docklands Light Railway within designated zones for a specified time period.

In December 2012, London buses were updated with card readers that can read both the Oyster card and contactless cards issued by banks -- which, is proving to be problematic when it comes to Travelcards.

In rare cases, instead of reading the Oyster card and detecting the pre-paid Travelcard loaded onto it, the card reader is deducting the bus fare from the traveller's bank card. This means travellers effectively pay for the same journey twice.

The solution to this problem is noticeably low-tech; keeping your bank card and Oyster card in separate wallets. Transport for London (TfL) also suggests removing the card you wish to use from your wallet and placing it on the card reader on its own, instead of swiping your entire wallet over the reader.

TfL says it will refund customers charged on the wrong card. To get your money back, contact TfL on 0845 330 9876 or email oysterenquiries@tfl.gov.uk.

Other phantom charges
The other concerning issue with contactless payments involves cards being charged when the customer didn't intend to use it to pay.

For example, some consumers reported they've handed over cash for a purchase at Marks & Spencer, but, when they check their bank statement, find they have also unknowingly paid for it using the contactless card in their wallet.

This reportedly happens if a customer places a purse or bag too close to the card scanner at the till when they have been paying with an alternative card or cash.

On 18 May, Radio 4's Moneybox programme reported a Pret a Manger customer had contacted the programme to report a payment was taken from her contactless-enabled MBNA Visa credit card when she paid with a different card.

Common enough to worry about?
The UK Cards Association insists the technology is safe and that phantom or double charges are extremely rare amid the more than 125 contactless card transactions made every minute in the UK.

"It is always disappointing to hear that customers have had problems making card payments," wrote a UK Cards Association spokesperson in a statement. "However, these problems are exceptionally rare, with only a handful of cases reported where the wrong card was debited when accidentally placed very close to a contactless card reader. ... The technology is extremely robust, has been thoroughly tested and is working as expected."

MBNA says it had no evidence to substantiate the claims made to Moneybox, but it pointed out that if an MBNA customer contacted it about any potential unauthorised transactions on their account, it would investigate.

While any technical hiccups get investigated, check if you have any contactless bank cards in your wallet. If you've been mailed a new card recently, there's a chance that you do. If you do have contactless cards, be sure to keep your wallet away from contactless payment terminals after removing the card you want to pay with. And keep an eye on your account balances so that you can report any erroneous double charges to your bank immediately.

See related: Contactless card payments now accepted on London buses, Contactless payments doubled during Olympic Games

Published: 21 June 2013