Contactless Cards: Tips for Safeguarding Your Bank or Credit Balance

• Author: Mary Singleton
• Posted: 2023-12-05

Given the risk of infection from SARS-CoV-2 variants, many people have turned to contactless or touchless payment solutions for an added measure of safety. Although these cards make it easier than ever to pay for products and services quickly and safely, they're not 100 percent risk free.

A lot of debit and credit cardholders rightfully fear criminals using skimming and other technologies to steal their card details and access their account balances. Yet, fraud isn't the only thing they need to worry about when using these cards. Once a contactless transaction starts, you have no way to stop it since it only takes 1-to-2 seconds for the payment to process at the point of sale. If you accidentally use the wrong card, you might take out too much money from an account that has an automatic payment coming out of it soon. You might also lose important cashback or points-based rewards.

The following information can help you prevent losses when using these cards:

How Do Contactless Card Payments Work?

A contactless debit or credit card transmits payment information from the card to a compatible card reader using radio-frequency identification (RFID) technology via antennae and an embedded chip. The information then goes through the payment card network processor whose name is printed on the card. The processor then approves or declines the card based on information from the issuing bank as dictated by the cardholder's balance amount and other details.

Can Accidental Payments Actually Happen?

The short, emphatic answer to this question is "yes." Many banks, credit card companies, network processors and financial service companies claim that accidental payments are impossible: The largest credit card payment card network processors, Mastercard and Visa, literally use similar language when stating that accidents can't happen. Yet, plenty of cardholders have shared stories about their accidental transactions online. The cards are PIN-less, which means that you don't have to confirm the payment as a secondary safety measure. If you bring one or more cards within range of a compatible contactless reader, an accidental transaction can occur.

How Do Things Go Horribly Wrong?

The key to understanding this topic is for you to read between the lines when reviewing the information presented by payment processing and financial service companies and others who wholeheartedly support the technology. Both Mastercard and Visa admit that their cards don't require a physical tap to work. A card must only be "near" a compatible reader. They also admit that contactless payment can occur up to 2 inches from a compatible reader. Some cardholders have reported accidental transactions occurring at 1 foot or more away from a reader.

Although you can't accidentally tap and pay twice during a transaction using the same or two different cards, both companies note, weirdly almost as an aside without a clear warning label, that you must remove the card you want to use from your wallet or purse instead of tapping the entire wallet or bringing it or a purse close to the reader. Even though a contactless card reader can read a compatible card in a wallet or purse or even the palm of your hand, it has no way of knowing with a stack of cards if you want to use a debit card on one side, a credit card on the other side or another similar card located in the middle. It reads the closest card.

Preventing Accidental Contactless Payments

If you're planning on partially paying a large amount at the point of sale using two cards, you might use the wrong card if you place both cards on the counter next to the reader or hold them in your hand while leaning against the counter waiting for the reader to prompt you to use the first card. Accidental transactions can also happen in crowded areas like bars and restaurants, especially if wait-staff carry wireless handheld readers that pick up on one of your cards by accident when nearby.

The best way to prevent these types of incidents is to keep your wallet or purse next to your body below counter level until you need a card. Pull out a card only when you're ready to use it, and make certain you're not close to the reader while handling your card or cards. If possible, carry only the card or cards you plan to use when traveling anywhere even if merely to a local grocery store or restaurant. At a restaurant, for example, keep your wallet or purse off the table and next to a window or wall so that your cards aren't in range of any wait-staff walking by your table.

Things to Keep in Mind

It's no surprise that most cardholders are unaware of the potential of accidental contactless payment card transactions. Many technologies have "hidden" risks that only come to light after incidents and complaints occur. Payment processors and others in the financial sector don't emphasize these types of risks because of a combination of disbelief that accidental transactions happen enough to warrant a warning and focus on other forms of risk and the convenience that these cards offer their customers. Debit and credit cardholders must be proactive and take extra steps to safeguard their cards on their own. Once you understand these facts, you have all the tools you need to protect yourself and your related finances.