A guide to contactless card payments

A contactless payment is a quick and easy way to make relatively small purchases. As we’ve seen during the pandemic, this way to pay has soared in popularity, with the total value of contactless payments in December 2020 rising by almost 65% year on year. But just how safe is contactless? Here’s everything you need to know.

A contactless payment is a quick and easy way to make relatively small purchases. As we’ve seen during the pandemic, this way to pay has soared in popularity, with the total value of contactless payments in December 2020 rising by almost 65% year on year. But just how safe is contactless? Here’s everything you need to know.

Anelda Knoesen
From the Money team
6
minute read
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Posted 18 MAY 2021

What is a contactless payment?

Contactless payment is a feature on debit, credit and prepaid cards that lets you make quick payments for things like groceries, takeaway coffees and bus fares. Instead of entering a PIN, you just place your card on the reader and your payment is complete.

It's also now possible to make contactless payments with smartphones and smartwatches, so there’s no need to carry cash with you when you’re out and about.

What is the limit on a contactless transaction?

Currently, contactless card payments can be made up to the value of £45 per transaction, but that’s set to increase to £100 later in 2021. The limit is being raised because the coronavirus pandemic has accelerated the shift away from cash, with retailers encouraging customers to use contactless for safety reasons.

The move will bring contactless card payments more in line with other contactless technology that doesn’t set limits. For instance, till machines that are equipped for Apple Pay and Google Pay are able to accept such payments above £45 (although some retailers may choose to set a lower transaction limit, to coincide with the cap used for contactless cards).

For UK transactions, there isn’t usually a daily limit on the number of times you can make a contactless payment. But you’ll need to have enough money in your account, or be within your overdraft limit, to cover the cost of any purchases. And from time to time, the card payment machine will ask you to push in your contactless card and enter your pin, for security reasons.

Can anyone get a contactless card?

In many cases, contactless is just a part of the credit or debit card. But be aware, it’s not an automatic facility given to everyone, so you shouldn’t assume you’ll definitely be able to get one.

You must be at least 18 to get a credit card, while some banks also won’t give contactless debit cards to anyone under the age of 18.

How do contactless cards work?

The cards have a chip within them that gives out weak radio signals. When you hold your contactless card to a payment terminal, the terminal and card will ‘talk’ to each other. If your transaction’s approved, you’ll see a green light or hear a beep. 

Alongside contactless card payments, more and more payments are now being made through smartphones and smart watches using the same process.

Where can I use contactless cards?

You can use your contactless card at any reader displaying the contactless payment logo. This is made up of four curved lines, similar to the Wi-Fi symbol, but on its side.

You won’t have to go far to find somewhere in the UK that accepts contactless payments, and many more retailers have come on board since the coronavirus outbreak. Contactless cards may be accepted:

  • in shops and newsagents
  • in restaurants, cafes, pubs and takeaways
  • at post offices
  • by vending machines
  • for bus, train and tram fares
  • in car park
  • for Tube fares and other public transport in London

For businesses that don’t use contactless, you can still pay by cash, or card using your PIN.

How safe is contactless?

Contactless is seen as one of the safest ways to pay because you don’t have to hand your card over to anyone or expose your PIN to prying eyes. Plus, it’s far safer than carrying wads of cash around with you.

Some people worry they could accidentally pay for something they didn’t want, by passing near a payment reader. But the contactless chip needs to be very close to the terminal (between 2-10cm) and the amount has to be entered, for you to approve it first. It’s also virtually impossible for fraudsters with secret illegal card readers to take payments from cards in wallets, purses and pockets.

Of course, there’s always a risk of credit and debit cards falling into the wrong hands, but contactless fraud remains low, amounting to 1.8p in every £100 spent in 2020, according to UK Finance.

What if my contactless card gets lost or stolen?

If your card is lost or stolen, you should report it to your provider immediately. Lost or stolen Debit cards are normally protected under the Payment Services Regulations. Lost or stolen Credit cards are normally protected under the Consumer Credit Act.

As long as you inform the bank as soon as you discover the fraudulent transaction, you’ll usually be able to get a refund or claim your money back.

It’s worth noting, though, that this assumes you’ve not acted without reasonable care (for example, you haven’t disclosed your PIN to someone else or written it down). As long as you meet these conditions, your bank or building society will usually reimburse you for the full amount.

But you could be liable for up to £50 of any fraudulent spending, if you fail to report the card as lost or stolen straight away.

PIN checks after repeated payments

Additionally, every bank sets a limit on the number or value of contactless transactions that can be made before a cardholder is asked to enter their PIN. At this point it would be impossible for someone to use the card they’ve found and stolen. What’s more, your bank is routinely looking out for any unusual transactions that may suggest someone other than you is using your card.

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We’ll help you compare credit cards to find one that’s most suited to your needs. Try our eligibility checker to find out which cards you’ll be accepted for before you apply, without it affecting your credit score.

Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.

Frequently asked questions

Is there a charge for using a contactless card?

No, contactless payments are free. Don’t forget though, additional charges may apply when using your card abroad.

I used contactless and had to enter my PIN. Why?

Occasionally, you may be asked to enter your PIN at the terminal. Don’t worry, this is just a security check. It’s simply verifying that you, as the authorised cardholder, are still the one with the card.

How do I know if my card is contactless?

You’ll be able to tell whether your card is contactless or not by looking for a four line ‘wave’ symbol on it. Places that can take contactless payments will display the same symbol you see on your card, at their payment terminal.

How do I use my contactless card for the first time?

When you use a new card for the first time, you’ll need to pay with your PIN to unlock the contactless payments feature. After this, you can just tap and go. You’ll only have to enter the PIN again occasionally to verify your identity.

Do I need to be careful how I use the card when paying?

Most of us keep our cards in some sort of wallet, and the temptation can be to simply tap the whole wallet on the payment terminal. But if you have more than one card in there, in theory, you could be charged twice. For example, if you’re in London using an Oyster travel card, your credit or debit card could also be charged if you tap the whole wallet.

But banks use technology that should prevent this happening – only one card should be charged. There’s a simple way to avoid any doubt – take out your card of choice and present it directly to the terminal.

Could I be charged twice for one transaction?

No, this shouldn’t usually happen. Payment terminals have been designed in a way that prevents you from paying for the same thing twice. Once you’ve placed your card on the reader, the transaction is complete.

But as we mention above, there’s a small chance you could be charged twice if you tap your wallet (with multiple cards inside) on the reader, rather than your specific payment card of choice.

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