A guide to contactless card payments

For many, a contactless payment is just a quick way to make small purchases. But our research has shown that a total of more than £2bn was stolen from Brits in a year (around one in 10 adults), so it’s important you know a little more about contactless payment cards.

For many, a contactless payment is just a quick way to make small purchases. But our research has shown that a total of more than £2bn was stolen from Brits in a year (around one in 10 adults), so it’s important you know a little more about contactless payment cards.

Anelda Knoesen
From the Money team
minute read
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Posted 7 JANUARY 2020

What is a contactless payment?

A contactless payment is a feature on debit, credit and pre-paid cards that lets consumers make quick payments for goods and services – typically by placing a payment card on a card reader. Instead of entering a PIN, you just place your card on the reader and your payment is complete.

What’s the limit on a transaction?

Typically, contactless payments can be made up to the value of £45 per transaction. However there may be exceptions. For instance, Apple Pay tills are able to accept payments above this amount (although this does vary from bank to bank, and is only from payments made by Apple phones).  

For UK transactions, there isn’t usually a daily limit on the number of times you can make a contactless payment; but of course you’ll need to have enough money in your account – or be within your overdraft limit – in order to cover the cost of any purchases.

Is there a charge for using a contactless card?

No, contactless payments are free. Don’t forget though, that 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 accepts contactless payments? 

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

Can anyone get a contactless card?

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

How do contactless cards work?

The cards have a chip within them that emits 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.

What if my card gets lost or stolen?

If your card is lost or stolen you should report it to your provider immediately. If you are using a credit card then you will generally be protected by the lending code (this is voluntary, but many banks sign up to it). This means that, as long as you inform the bank within 13 months of the fraudulent transaction, then you shouldn’t lose money. However it is worth noting that this assumes you’ve not acted without reasonable care (for example, you’ve not 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 your loss.

You could be liable for up to £35 of any fraudulent spending that happens before you report the card's loss or theft to your bank though. So, if a thief was to spend £300 from your account before you tell the bank, you may only receive £265 back. Therefore it's crucial that you report a lost or stolen card the moment you realise it's gone.

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 show someone other than you is using your card.

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 is to tap the wallet on the payment terminal. If you have more than one card in your wallet, 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.

However, banks do use technology that should prevent this happening, and only one card should be charged. In the case of Oyster, that will usually take priority if it’s presented along with another card.  There’s a simple way to avoid this issue though – take out the Oyster card out and present it properly to the terminal.

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