Contactless Card Fraud Has Doubled
3rd April 2019
If you’re running a hospitality venue like a restaurant or a pub in London or the South East, you’ll know how common contactless card payments have become and probably won’t be surprised to find out that the UK’s fraud reporting service, Action Fraud, has reported contactless card fraud doubled in 2018 to £1.8m stolen compared with £711,000 in 2017.
Average theft amount increased
The latest Action Fraud figures have also revealed the average theft through contactless fraud in 2018 rose to £657, compared with £493 in 2017.
Back in February 2017, figures from UK Finance showed contactless card fraud had already overtaken cheque fraud, prompting finance experts to warn banks against raising the £30 limit for payments to avoid incentivising more criminals to steal them.
Contactless cards incorporate a special chip that can be read quickly and easily by a payment terminal (without making direct contact), meaning entering a PIN is not necessary, thereby speeding up transactions and often reducing the queue at the bar more quickly.
How can hundreds be stolen? I thought it was only up to £30?
Current rules mean only payments of up to £30 can be made using contactless technology and, as such, many of the contactless thefts have involved the thieves taking multiple small amounts using the same card so that users don’t notice immediately.
Why the doubling of contactless card fraud?
Many commentators believe the simple fact that contactless is overtaking chip and PIN as the most popular way of paying for goods and services now and that a PIN is not required to use a stolen card, are the main reasons why contactless card fraud levels have soared.
Worldpay figures, for example, show that more card payments were made using contactless technology than chip and PIN in the UK over the year from June 2017 to June 2018 and that after increasing by 30% on the previous year, contactless payments are now the most used card payments in shops. Yolt figures show that 76% of Britons have used contactless payments and 40% make half or more of their card payments using contactless.
Even though UK Finance, the body which represents many banks, is quick to point out that no contactless fraud has been recorded on cards still in the possession of the original owner, contactless cards have robust security features built-in and customers are fully protected against any losses from contactless card fraud, the Action Fraud figures still appear to show a security problem.
This problem has not gone unnoticed by consumers. For example, even though many of us are now used to having and using contactless technology, MoneySuperMarket research from as recently as last September showed that 55% of those surveyed had concerns about the security of tap-and-go technology.
What does this mean for your hospitality business?
For pubs, restaurants, hotels and nightclubs, contactless payments offer the chance to reduce the cost and hassle of having to handle cash, cut queues, increase the speed, and hopefully, the frequency of transactions because of smaller queues at the bar, etc., increase average transaction values (ATV), provide a clear audit trail and assured payment, and even the chance to change to better business models e.g. card/contactless only cafes and bars in cities. For customers, contactless offers a better, more convenient and faster way to pay.
Despite this good news, there are still security concerns for customers but venues can help by having good security inside their venue such as CCTV and security staff to prevent contactless cards being stolen there but they can also help to keep their customers’ data safe. By having a secure network from Astaris, hotel, pub, restaurant and other venue owners can be PCI compliant and keep their customers’ data, including payment details, safe so they can buy with confidence.