Finance experts have warned that the limit on contactless payments should not be increased from the current £30 limit after fraud involving the ‘wave and pay’ method overtook cheque scams for the first time.
Figures collected by UK Finance, who work with police and represent the payment industry, showed that contactless fraud in the first half of 2017 hit a whopping £5.6 million. In comparison, cheque fraud amounted to £5.3 million in the same time period.
Banks have been warned off raising the existing limit of £30 for payments that do not require a pin, as there are fears it could further encourage criminals.
The Bank of England’s chief cashier, Victoria Cleland, said she does not have a contactless cards herself.
‘I personally don’t really use contactless,’ she told the Guardian.
Figures collected by UK Finance, who work with police and represents the payment industry, showed that contactless fraud in the first half of 2017 hit a whopping £5.6 million
‘To be blunt, it wasn’t on my card for a long time and so I’ve just got into the habit of preferring not to.
‘And I do hear stories of friends – this is a personal anecdote, this isn’t the official Bank view – whose money has been taken off contactless when you walk past something.’
Ms Cleland added: ‘We may see the fraud increase because it would become better for them – they can actually get £50 of goods rather than £30 of goods for the same work.
‘My concern is the limit going up. If the limit goes up, it will increase the fraud. The only way you can tighten up around contactless is not to increase the limit any more.’
Sarah Lewis, Head of ID and Fraud Decision Stratgegy at Equifax UK told the Daily Telegraph: ‘I would like the limits to stay where they are, that would make me feel more comfortable.’
She added: ‘Unfortunately with contactless you can download some illegal software and get it on your phone that can read your card details.
‘It’s not like half the population are being defrauded, it’s a very small percentage.’
However the money expert added that with cheques and cash becoming less prominient, she warned contactless fraud could start to rise.
UK Finance, which works with police and represents the payment industry, said: ‘Contactless fraud is low with robust security features in place in every card.
At the same time, customers are fully protected against card fraud and will never be left out of pocket, unlike if they lose cash.
‘Individual firms have introduced processes to prevent fraudulent contactless transactions appearing on an account when a card had been reported lost or stolen.
‘Technical changes are also being introduced resulting in the vast majority of contactless transactions going online, where a transaction is authorised directly with the card issuer.’
How secure are contactless cards?
There has been a massive rise in contactless payments following the introduction of bank cards that allow it for transactions of £30 or under
Most banks in the UK now issue their cards as contactless cards meaning they can be used for transactions of £30 or under without a PIN or signature.
Other methods of contactless payment include using smartphones, mobile phone apps, key fobs and wearable devices including watches and wristbands.
According to the UK Cards Association, one in four card payments are now contactless – totalling more than £3.3 billion every month.
Contactless cards are built using the same secure system as Chip & PIN with each including a range of security features to safeguard information and protect customers from fraud.
There have also not been any confirmed reports of money being stolen from a contactless card while still in its owner’s possession, according to the association.
However, customers will get their money back from their bank if they are a victim of fraud.