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Contactless payments increase by 97% – but how can you avoid fraud?

Find out how to keep your money safe

Contactless payments increase by 97% – but how can you avoid fraud?

A new report from UK Finance has revealed that the number of debit card payments in 2017 outstripped the number of cash payments for the first time.

This was due, in part, to the boom in contactless payments, which increased by 97% during the year to 5.6bn payments.

Which? has looked into what the rise of contactless payments means for the safety of your money.

How many people pay using contactless cards?

In 2017, there were 13.1bn payments made in cash, compared to 13.2bn debit card payments – mainly due to the surge in contactless card payments.

Of the total number of debit card payments, almost half were made by consumers swiping their contactless card.

This increase is partly due to the fact that the vast majority of retailers, pubs and restaurants now accept contactless payments – plus, you can even spend it on TFL in place of an Oyster card.

Contactless technology is now available on the latest smartphones, enabling people to pay without a card on Apple Pay, Samsung Pay and Google Pay.

The report stated that 77% of 25 to 34-year-olds were likely to make contactless payments, in comparison to just over half of those aged 65 and above.

It was projected that this trend would continue, with contactless payments set to soar to 20bn by 2027, and cash payments to drop to around 6bn.

Are contactless cards safe?

While the majority of contactless card transactions are trouble-free, fraudsters are finding ways to take advantage of this new payment system.

The first half of 2017 saw more than £5.6m was lost by Brits who were victims of contactless card fraud, according to UK Finance

This figure was up from £2.9m lost in the first half of 2016.

While this sounds like an alarming figure, contactless card fraud accounted for just 0.02% of total spending, – perhaps because of the relatively low £30 limit for each contactless transaction – and 1.9% of all card fraud.

That being said, it’s still important to remain vigilant against potential criminal activity.

  • Find out more: Contactless cards – our guide explains everything you need to know about this payment method

How does contactless card fraud take place?

Most contactless card fraud happens when a scammer manages to take your card by either distracting you while they steal it, or by pick-pocketing – according to a report by Financial Fraud Action UK (FFA).

A previous Which? investigation revealed how criminals could steal the details from your card using a card reader that can be easily bought online.

The details could then be used to make purchases online for items of a much higher value than the £30 contactless card limit – our researchers managed to order a £3,000 TV.

It’s been suggested that criminals could use a card reader to process payments by standing near someone in a crowded place and reading their contactless card through their clothes.

There are a number of RFID wallets on sale – lined with aluminium to block the signal of criminal card readers – but there is little evidence that this use of card readers is widespread or account for large amounts of fraud.

What if my card gets stolen?

If your card is stolen, tell your bank as soon as possible and it should immediately refund you the money you’ve lost.

The only case where this might not happen is if it can prove you’ve acted negligently.

Note that cases have been reported where a stolen contactless card has continued to successfully be used to make transactions even after it’s been cancelled, so make sure you continue to check your bank statement and report any suspicious spending.

While many contactless card providers claim that only a small number of transactions can take place before you’ll be asked to provide a Pin, a 2016 Which? investigation found that several banks allowed 10 consecutive contactless payments to go through, spending more than £200.

How to prevent contactless card fraud

There are a number of steps you can take to protect yourself against fraud when using a contactless card:

  • Don’t keep your cards in pockets or bags that are easy for pick-pockets to access
  • Don’t let anyone take your card out of sight while taking a payment – this is in case they are using a skimming device to copy data from its magnetic strip
  • Ask for a receipt to make sure you aren’t being overcharged
  • Make sure you report any lost or stolen cards to your bank or card issuer as quickly as possible
  • Check your statements regularly – including those for lost or stolen cards – watching out for any payments that weren’t made by you
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