Concerned U.k. Consumers Are Saying ‘no’ to Contactless Cards

Contactless payments in the U.K. have experienced off-the-charts popularity among consumers. However, a small but growing number of these consumers are beginning to choose to say “no” to it. The reason might surprise you.

According to PYMNTS.com, “The new emerging trend comes as the U.K. undergoes a massive upgrade of payments terminals and as the customers pull an extra £10 out of their pockets with the new £30 transaction limit in force.”

Out of the 8 million to 9 million contactless cards that have been issued since 2013, banks have reported that they have only received 1,200 requests for a non-contactless card. These numbers come from the Royal Bank of Scotland and its subsidiary, NatWest Bank. At first glance, these findings may seem irrelevant. But consumer’s decisions to say “no” to contactless cards are actually completely understandable.

Contactless payments

Research was conducted by a U.K.-based watchdog group that revealed just how simple it is for these cards to be compromised. A simple scanner can very easily pick up essential details; such as, the credit card number and expiration date. Privacy expert Peter Eisenegger, from the National Consumers Federation, recently told The Daily Mirror that some cards can be read from up to 8 inches away.

To make matters worse, a scanner is able to compromise not one, but as many as six different cards at once. When you take into consideration that there are approximately 58 million contactless cards of the same type that was used in the research test, consumers in the U.K. are increasingly at risk of having their information stolen.

In an effort to glean more information on this issue, This is Money, a U.K.-based financial website, reached out to several different financial institutions. Santander, HSBC, Lloyds and Nationwide BS all confirmed that it is possible to opt out of a contactless card. In the midst of this debate, the U.K. Cards Association stated that it does not believe that there is an imminent fraud threat to issuers or consumers.

Head of policy at the U.K. Cards Association, Richard Koch, stated that “Instances of fraud on contactless cards are in fact extremely rare, with losses of less than a penny for every £100 spent on contactless – far lower even than overall card fraud”.

Like consumers and issuers, many merchants are also concerned about the potential losses and fraud threats. For industries that are already categorized as being “high risk”, it can be difficult enough to secure payment processing solutions. Many merchants that find themselves in this situation have turned to high risk providers – that specialize in offering high risk solutions; such as, high risk merchant accounts. Only time will tell how much issuers, merchants and consumers should be concerned about the threat contactless cards might pose.