Are Contactless Payments Secure?

Contactless payment, as implemented by industry leaders American Express, MasterCard and Visa, is very secure. The financial payments networks used to process contactless payments are the same networks that process millions of magnetic stripe transactions securely today. The primary difference is that the contactless payment device (card, fob or other form factor) uses radio frequency (RF) technology to send payment account information to the merchant’s point-of-sale (POS) terminal, instead of requiring the payment card’s magnetic stripe to be swiped. Contactless payment devices are designed to operate at very short ranges–less than 2-4 inches–so that the consumer needs to make a deliberate effort to initiate the payment transaction.

In addition, the financial payments industry has designed multiple layers of security throughout the traditional credit and debit payment systems to protect all parties involved in a payment transaction. Most of these protective measures are independent of the technology used to transfer the consumer payment account information from the payment card or device to the merchant POS terminal and are used for both magnetic stripe and contactless transactions. For example, online authorization, risk management and fraud detection systems are used to detect potential fraudulent activity for any credit or debit card payment transaction. Plus, the liability policies which protect consumers for traditional consumer credit and debit accounts also apply to contactless transactions.

Furthermore, information from a contactless payment device cannot be transferred to a conventional, magnetic-strip device, which virtually eliminates the incidence of manufacturing fraudulent cards. If a criminal tries to pay for any purchase using a magnetic stripe card programmed with illicitly captured contactless payment information, the transaction will be denied by the issuer authorization system.

For more information, read the white paper found at Northern Leasing Systems.


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