You may have noticed merchant terminals and your own cards are popping up with PayWave and PayPass logos where you can just scan your card to pay for a purchase under $100 without entering a pin or signing. Whilst the technology has been around for a few years many people are still scared that it is unsafe. There are also people reporting about being able to scan your card from your bag or wallet in your pocket. So is this true and how safe is it to use?
What is PayWave and Paypass?
Visa PayWave and Mastercard Paypass is a feature on almost all new credit cards. The cards are embedded with a near-field communication (NFC) chip which sends information to the Point of Service (POS) terminal (the machine where you swipe your card). You simple just tap your card on the reader so you no longer have to swipe or insert your card, and you do not need to enter a pin or sign for the purchase. This is restricted to purchases under $100. Retailers are taking this up to reduce waiting time and cash handling.
How does it benefit you?
There are a few reasons why using the tap and go system can be more convenient for you. You don’t need to worry about carrying around change or a lot of cash, you have control because the card doesn’t leave your hand, you can track all your smaller purchases more easily than using cash (this will help you manage your budget and expenses) and it is fast for you to use.
Are Mastercard Paypass and Visa PayWave safe?
This is probably the most common question that is being asked but there are some precautions in place. The card has to be 4cm away from reader so you cant pay for someone elses purchases. There is also a unique code for each transaction which prevents it going through twice. Even if you accidently tapped twice you will not be billed. Your card also never leaves your hand which actually can prevent any fraud from a retailer. The cards also have secure encryption technology which protects your data.
What if fraud does occur?
There is a zero liability policy on the cards so any unauthorised transactions have 100% guaranteed reimbursement. You do need to be aware though because this may not cover ATM and some eftpos transactions but it is likely your provider has other fraud reimbursement policies to cover these types of transactions. Also keep in mind that transactions have to be under $100 so if the theif used it multiple times they have a higher risk of being caught.
So can the card be read through clothes and wallets?
This has long been contested and denied by many people. At the beginning of the year Kristin Paget a security researcher went on stage in Washington and showed how she could use a few hundred dollars’ worth of equipment to read data off a volunteer’s card in his wallet in his back pocket, and made a fraudulent transaction. One good thing though is the newer cards the user’s name, PIN and CVV number aren’t able to be read.
Further as stated above the cards are set to offer only a one time CVV code with every scan which means the code can only be used for one transaction. If the card is used agin with this code the card will be disabled.
I think the point is that using the tap and go cards are no less risky than using traditional cards with pins and signatures. Signatures can be copied and pins can be skimmed/recorded at ATMs. The important thing to remember is that if something were to happen and you reported it immediately you will be reimbursed.
The banking Ombudsman also state that user’s rights are broader than the card companies zero liability policy giving you more protection. I like the fact that it is quick and convenient, and I like not having to hand my card over to someone which is even more risk of something fraudulent happening.