Make payments without swiping and PIN! How secure are these contactless cards?

The card may be handy for elderly people, for whom remembering the PIN of their card may be difficult, but for others it may just create security issue.

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A new technology has been used in the contactless cards in which the EMV chip inserted in the card transmits wi-fi signal.

On the New Year eve, I went to the Green Park market in New Delhi to buy some sweets. At the time of payment, I handed over my SBI VISA credit card to the person at the cash counter of Evergreen Sweet Shop and was just trying to remember the PIN, which I had set a few days back on receiving the new card as the old card was stolen two weeks back. But to my dismay, as I was recollecting the PIN, the person at the counter handed me the receipt without even swiping or dipping the card (i.e. inserting the card in the point of sale (POS) machine)!

I got confused and asked the person how the payment was made without dipping and punching the PIN. He said, “Because it’s a wi-fi card.” As my confusion was not yet clear, another customer showed me the wi-fi symbol printed on the card and cautioned me that anyone having such a POS machine may catch the signal and take out money up to Rs 2,000.

The card may be handy for elderly people, for whom remembering the PIN of their card may be difficult, but for others it may just create security issue. So, I called up the SBI customer care and contacted VISA, to know how secure these cards are.

Contactless card: These cards are called contactless cards as the cards need not be swiped or dipped in a POS machine. Rather a new technology has been used in the contactless cards, which is not wi-fi, but is based on NFC (near field communication) and RFID (radio frequency identification).

How it works: As explained by experts, the card contains a chip and an antenna (which is a super thin metal wire) and gets electricity through induction via a radio frequency field sent by the POS terminal, in proximity of which the card is placed for payment. Induction is the physical phenomenon through which the wired antenna will convert the radio frequency field emitted by the terminal, into electricity to power on the chip. Then this chip and POS terminal will exchange information in an encrypted way, in a fraction of a second, to enable the transaction.

Safety: According to Visa, a contactless card is as secure as any other Visa chip card, because it carries the same multiple layers of security. Multi-layer security ensures that you are safe from fraudulent or unauthorised transactions.

Security: A contactless card, according to Visa, would only work when the card is within 4 cm of the card reader. Moreover, a contactless payment terminal can only process one transaction at a time. So, there will be no chance of cross payment or payments in duplicate or more.

Advantage: According to Visa, the advantage of using a contactless card is that you remain in control of your card at all times as the card doesn’t leave your hand during the transaction. So, the chance of misusing your card through cloning or otherwise would be minimised.

Disadvantage: As the wi-fi signal is transmitted freely and may activate any authorised POS machine or device, unauthorised payments may also be initiated easily through fraudulent use of any such device. However, declining that the signal may be picked up in an unauthorised way, SBI card customer care executive Hemant said, “Any unauthorised transaction up to Rs 2,000 may only be done when the card is misplaced and used intentionally by a person, who has got possession of the card.” When asked, who will be liable to pay the bill in case of such an unauthorised transaction, Hemant said, “The liability would be ascertained after an investigation by the concerned fraud control department of SBI.”

Moreover, a contactless payment terminal can process signal of a card only once at a time. So, if the transaction gets canceled while processing, payment cannot be made contactless through the same payment terminal again. So, you have to either cancel your transaction or pay by swiping or dipping your card in a POS machine, thus sacrificing the contactless advantage of the card.

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