Contactless Cards - Convenient or Scary?

Altaf Halde, Managing Director,  Kaspersky Lab Picture this: You’re in the midst of the interval crowd at the cinema. Popcorn and soft drink in hand, you want to rush back to your seat before the film begins. You simply flash your phone before a screen. Beep! In under 10 seconds, your transaction is (delete securely) processed. You’re back in your seat, well in time! This isn’t sometime in the future – this is happening right now! Contactless cards have been changing the way millions of Indians have been paying, and it’s here to stay.

Contactless Cards work on the Near-Field Communication (NFC) technology. So when you wave or tap your card on the Point of Sale (POS) terminal, radio waves establish contact and process the transaction, with no need for further checks or secure PINs. This greatly saves checkout time – the biggest hurdle at most retail spaces. NFC helps to cut the transaction time by over 50 percent, saving millions of minutes every day. It also saves the card-holder the trouble of remembering multiple PINs, swiping the card and an erratic telephone connection that often snaps mid-way through transactions.

In March 2015, ICICI Bank introduced India’s first contactless mobile payment solution. 30 million customers of ICICI now had an option to wave their smartphones at POS to breeze through the checkout counter. By end-2016, most major Indian banks like SBI, HDFC and Axis Bank, were offering contactless card payments to their customers. Currently, the RBI has set a transaction limit of Rs.2,000 for payments made through contactless cards. This limit is set to be raised eventually. For transactions above Rs.2,000, the user will be required to punch in their PIN for enhanced security. The mode is extremely popular, despite its recent launch. Today, over one lac merchants are accepting contactless payments through phones, magnetic swipe and chip cards.
This includes people we need every day - petrol pumps, cinema halls, grocery stores and small-time retailers. According to statistics, almost 70 percent of all credit card transactions in India are below the value of Rs.2,000. All these transactions, can now be completed in under 5 seconds, as against the average of 18 seconds that it took earlier. That’s a whole lot of time saved!

No matter how powerful a thief’s scanner, it is practically almost impossible to steal your card details from your pocket

What, then, is the glitch? Surely something so convenient, comes with numerous security threats? Surely, it does. Some of the main challenges it faces are:

• Smart hackers can find a way to steal your contactless card details and use it without your permission

• Since it’s contactless, thieves don’t even need your card to steal your money anymore!
• There are ways to bypass the transaction limit. Altaf : this is information from Kaspersky Secure list Researchers at University of Newcastle found that if hackers managed to choose to transact in a foreign currency, they could bypass the limit that was set in GBP.

• Some times, even if your current transaction is safe, hackers could find a way to steal your payment card credentials, for future thefts

Worried so much that you won’t use the contactless cards, ever? Don’t be. Because very simple solutions are at hand. And fortunately, massive losses or huge frauds have so far, not happened. So what could make the contactless system safer?

• No matter how powerful a thief’s scanner, it is practically almost impossible to steal your card details from your pocket

• Still concerned someone will scan your details? The easiest TOOL hack is probably to insert an aluminium foil in the card compartment of your wallet. That should keep all the stealing scanners away!

• Two-factor authentication is required above the limit of INR 2,000. So even if a fraud transaction does happen, there’s an upper limit to the damage. Also, you can always raise a dispute with your bank to follow it up.

• Effectively, the contactless card is no more dangerous than your existing debit and credit card. So if you’ve been using your cards with reasonable safety up until now, you have little to worry about.

So while contactless cards are the future, it comes with its own challenges. But like with everything else, there are solutions. It’s smarter to embrace the advancement while taking basic precautions, than shunning it. So go ahead, wave your card, say hello to the future!