Credit Cards

Mastercard Contactless System – Security Issues Found !

EPF Last Update: May 17, 2020

Many debit and credit cards now have the tap-and-go technology which allows you to pay without a pin code, or the swiping of a magnetic. Contactless cards make it more convenient to pay for merchandise, and transactions are completed in under a second.

A contactless Mastercard uses an embedded computer chip and a radio frequency antenna. After you tap your contactless card at the checkout, the payment details are sent wirelessly to the Mastercard network. Moments after you tap, you will receive payment confirmation on your mobile phone, and be on your way in less than a minute.

Your contactless card needs no special treatment. Treat it exactly as you would any credit, debit, or registered prepaid card. You can use it anywhere you see the contactless symbol at the checkout, and simply tap to pay. Stores who may have a contactless payment reader include fast food restaurants, gas stations, pharmacies, retail stores and more. Just look for the symbol.

If the facility is not available, you can use your contactless card in magnetic stripe readers, or chip and pin systems.

Contactless transactions and purchases will be displayed on your statement just like any other card purchases you make.

Why Should You Use Mastercard Contactless Card System?

There are many benefits to contactless card payments. Here are just some of them.

  • Your card does not need to be handled by anyone else at a checkout point, and encryption, unique to every purchase, protects your data, reducing the risk of loss and fraud.
  • There are safeguards in place to bill you only once if you accidentally tap twice.
  • It is not necessary to carry a lot of cash or small change around as you can tap-and-go for any amount.
  • You get better record keeping of all purchases than you do when paying cash.
  • Zero liability protection. Your financial institution will not hold you responsible for unauthorized transactions. As a Mastercard cardholder, this applies to fraud on your account relating to purchases made in store, online, and ATM transactions. The only terms that apply are whether you have used reasonable care with protecting your card from loss or theft, and you promptly reported loss or theft to the bank.
  • This is a great benefit which, if you have met the conditions, will give you peace of mind about unauthorized transactions. Note that zero liability does not apply to Mastercard commercial cards, or unregistered prepaid cards, like gift cards.

The speed of the transaction, often less than one second, is ideal for someone who has to be somewhere in a hurry, and does not have much time to spare.

Security Issues

Mastercard contactless card system is very secure, but as with other card systems, also up to the cardholder to advise the financial institutions immediately, if suspicious activity on the account is detected, or if the card is lost or stolen.

Here are some of the security systems in place.

  • If your contactless card is stolen, there is a limit to how often it can be used before reaching a daily tap payment limit.
  • Each bank has its own rules when it comes to limits on each transaction, and also has an overall daily limit. For example, one bank may have a limit of $200 per transaction, with an overall daily limit of $400, while another has a limit of $100 per purchase, and $200 overall limit.
  • Unless your card is speedily cancelled, the most a thief should be able to get away with will be your overall daily limit.
  • When your overall daily limit is reached, with your next tap-and-go payment will require a pin number to reset your limits, and keep your card safe.
  • To avoid “electronic” pick pockets, always stand within an inch or two of the checkout terminal, and keep the card in your hand. You can tap it yourself.

Always keep your cards in a safe place when not in use, and keep a record of all your card numbers, expiry dates, and emergency phone numbers.

Why US is Behind the Implementing Tap-and-go Payments?

Contactless cards and tap-and-go payments have benefit customers in countries like Australia and the UK. However, the US appears to be lagging behind in the use of this new technology, and consumers and merchants are losing out.

In spite of the fact that the US now has around 3 million new contactless capable terminals, consumer use is extremely poor. The main reason appears to be on the part of the issuing banks, who only managed to issue EMV chip cards in 2016, after being mandated to do so.

The roll out of the contactless Mastercards could take years before consumers actually benefit.

Conclusion

More and more innovative technologies are being developed to drive sales, and reduce fraud in a scam-laden industry. However, unless the banks speed up the conversion to contactless cards, many US consumers will lose out on benefits.

Although banks have been slow to recognize the opportunities of contactless cards, some groundwork is being done, and approximately 3 million out of 12 million terminals, are fully capable to accept tap-and-go payments.

It still seems a long way to go before tap-and-go becomes the norm rather than the exception.

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