Saturday, 16 June 2018

Contactless Cards are a Major step Forward For everyone Except Consumers

You’re running through the London underground, you don’t have an Oyster card or time to stop and navigate the ticket vending machine or the bemused queues. You need a drink and nip into a shop but only have big notes to pay and can’t stand the jangling coins in your skinny jeans pocket. You’re wasting your life in the express queue at the supermarket waiting for everyone in front of you to rummage in their pockets for the change to pay for the 10 items or less. But, we now live in the future, a time when each of us carries a reusable coin that only needs to be tapped on a machine to complete our transactions. Welcome to the world of NFC technology, contactless cards where your entire bank balance and even your credit limit is available in your pocket just waiting to satisfy those moments when antiquated methods of payment are just oh too time consuming for our modern pace of life.

Twitshot
The advantages of tap and go payments are just too numerous to mention. Just think of the savings to governments of minting notes and coins, according to the US Federal Reserve it costs between 4-9 cents to strike a coin and 5-13 cents to mint dollar bills. There are nearly 30 billion coins in general circulation and 40 billion notes. General adoption of cards will slowly but surely reduce this expense. Plus, unlike cash, digital card payments leave a trail that can be very useful for governments and marketers alike. Forget Facebook, nothing profiles a person like their purchases. Eventually, it is the aim of all economies to eradicate all cash currency and with it the black economy. Strikes me that it could make it difficult for MPs and senators to get their back-handers, maybe they’ve thought of that one already.


The head of the Bank of England doesn't trust contactless 

So, general adoption of our flexible friends makes so much sense, not to mention the next step which is the integration of NFC chips in our phones so we don’t even need our cards. We have come so far from Pieces of silver with our sovereign’s face stamped on it. Or have we?
The trouble with cash is that it is instantly transferable, you give it to someone and they can use it. The same goes for if they stole it. Credit and charge cards gave us a signature with which secured our cash, remember how we used to get traveller’s cheques that could be cancelled if we got pickpocketed or mugged in some far-off land. Security has been the main selling point of cards. From signatures we went to chip n pin, again we had to verify a transaction with our mark. If our cards got stolen, we could cancel them and stop anyone using our hard-earned. The bank could verify this with the signature or block it with an incorrect pin. I had my card cloned once in the UK and didn’t lose a penny despite the perpetrators going on a spending binge racking up nearly £2000 of transactions before I had even noticed.
Now, contactless doesn’t have the same security, up to a certain limit per transaction if someone gets your card, they can go up the high street merrily tapping and going and with no verification, you will have a hard time proving that they are not your transactions. Basically we are back to cash. The sheer volume of small contactless transactions is too much for the banking system to process in real time so they have thousands of offline transactions that can be processed in bulk at times of lower traffic. So, it could be days after realising and cancelling your card before the real damage can be seen.
My wife recently lost her card. She realised it fairly quickly and cancelled it. When she ordered a replacement, she requested that it be non-contactless. “We can’t do that, they are all tap n’ go now.” She was told proudly. She asked if this facility could be disabled at the bank end as she never uses it. “No, we can’t do that.”
“How can I be sure that someone doesn’t steal my card again and spend my money?” she asked.
“Well, they can only buy up to a limit.” The helpful bank clerk assured her.
She couldn’t tell her what the limit was, it seems to vary (and will vary in the country that you are reading this) and she couldn’t tell her how many contactless transactions could be made in a time period but she could sell her an insurance policy. She could sell her a SMS alert service that could add insult to injury by notifying her of each time she lost more money.

How to disable your contactless card

I spoke to a bank employee who gave me very little more information apart from the fact that statistically online fraud is much higher than contactless and while there are fears of having your cards scanned while in your pocket or bag, they are quite easy to safeguard against. Apparently, an anti-NFC wallet (RFID blocking) will protect you from cyber-pickpockets although, I have read much to dispute this. Keys and other metal objects, including wrapping your cards in aluminium foil can also block the swipers.
This is an immature technology which seems to have many advantages for banks, governments and thieves and a few conveniences for us. The impetus for improved security will only come from pressure from you and I and will probably come wrapped in more intrusive data mining. In the meantime, don’t be seduced by the ease of use and the new svelte line of your trousers.

Further reading:
The head of the Bank of England discusses her mistrust of the technology and how demand for cash is actually increasing


Practical instructions to disable the contactless ability of your card


America, who is usually so quick to embrace new tech especially when it is ease of payment has been slow to adopt chip and pin and contactless. We Europeans are quick to judge the Yankees, maybe the joke will be on us


The Swedes are a trusting people but there is a limit


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