Why Some Consumers Say 'No' To Contactless Pay

While contactless payments in the U.K. are seeing off-the-charts popularity among consumers, a relatively small but growing number of them are saying "no" to it.

The new emerging trend comes as the U.K. undergoes a massive upgrade of payments terminals and as the customers pull an extra £10 out of their pockets with the new £30 transaction limit in force.

However, if numbers just from the Royal Bank of Scotland and its subsidiary NatWest Bank — the largest retail bank in the U.K. — were to be considered, of the 8 million to 9 million contactless cards that have been issued since the end of 2013, the banks reportedly have received only 1,200 requests for a non-contactless card.

Though the number might appear to be almost insignificant to most, the reasoning behind the thinking of those consumers came out to be pretty solid.

As PYMNTS reported in July this year, research conducted by a U.K.-based watchdog group demonstrated how a simple scanner could pick up essential details, including the credit card number and expiration date, for as many six different debit cards.

With approximately 58 million contactless cards of the type used in the test, consumers in the U.K. are increasingly at risk.

Privacy expert Peter Eisenegger from the National Consumers Federation told The Daily Mirror that a small percentage of cards could even be read from up to 8 inches away.

“Even if this was to occur in 0.1 percent of cases, with more than 300 million transactions taking place last year, many consumers could be affected,” he said.

When This is Money, a U.K.-based financial website, reached out to different financial institutions, including Santander, HSBC, Lloyds and Nationwide BS, asking about the option of opting out of a contactless card, they all responded that it was indeed possible.

Amidst this, however, the U.K. Cards Association doesn’t believe in an imminent fraud threat to issuers or consumers. “Instances of fraud on contactless cards are in fact extremely rare, with losses of less than a penny for every £100 spent on contactless — far lower even than overall card fraud,” said Richard Koch, head of policy at the U.K. Cards Association, in an interview with The Guardian.

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The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.