Are contactless 'Tap & Go' bank cards safe?

As a catalyst for change, the event of the year 2020 accelerated an already shifting mindset towards conducting everyday activities in a contact less manner. This shift was not limited to social or personal lifestyle, but also the way one transacts and conducts purchases.

With innovation and digitalisation becoming a way of life, the banking sector witnessed significant acceptance and use of their various modes of digital payments, which included the quick adoption of mobile banking apps, ebanking, contactless 'Tap & Go' for those using debit and credit cards, and beyond considering the seamless experience and concerns regarding hygiene.

With the adoption of such technologies and increased customer awareness, security always remains the core focus of both - financial institutions and customer. So how secure are such modes of payments? And what can customers do to protect themselves from potential fraud?

Speaking to Muscat Daily, Ewan Macleod, chief transformation officer at Sohar International, elaborated on the security concerns about contactless payments. “I think the pandemic has been instrumental in driving people away from cash, specifically for small ticket amounts. We have noted that the confidence level of customers has risen during the pandemic to use contactless modes of payment for small amounts.

“We have records showing the slow and gradual increase of contactless transactions that are gaining momentum. There has been a dramatic change in such transactions in Oman due to the pandemic situation,” Macleod said.

He said contactless card payments have quickly become the preferred way of transacting, given the challenges posed by COVID-19 and the issues related to security and data protection which have always existed when it comes to digital banking.

Today, the use of contactless payments has increased significantly and one of the reasons for its growing popularity is the ease and convenience it offers. While this way of transacting has opened up new avenues offering a faster and convenient way to pay, it also brings with certain challenges that cannot be overlooked but definitely overcome.

“Contactless card transactions are processed through the same secure networks used for all VISA, MasterCard and OmanNet transactions and that contactless technology currently limits the value of purchases, hence reducing the value of potential fraud. The number of frauds in such transactions are close to nil according to the banking sector’s industry data on a global level which reflects the high security and reliability such modes of payments provide to customers,” Macleod said.

“The contactless payment platform also limits the amount per transaction to RO40 in Oman. Any purchase of a higher value will require customers to enter their PIN hence adding a second layer of protection. This has been set as a regulatory standard globally to ensure that there are measures and caps placed to mitigate against any significant risks.”

Macleod said that it is important to know that contactless cards or ‘Tap & Go’ cards are embedded with multiple layers of security to protect the user, so the chances of becoming the victim of fraud are extremely unlikely. “Contactless cards can only work within a short range of a POS terminal, which further protects from potential theft or gaining access to sensitive financial information from a distance,” he said.

While ‘Tap & Go’ cards are safe and provide multiple layers of protection to prevent fraud, there are also steps one can take to further protect themselves. “In case a physical card is possessed by an unauthorised person, the chances of misuse are fairly high. The estimated value of fraudulent transactions in this case can be up to RO200 across five separate transactions,” Macleod said.

“For security reasons, after the fifth consecutive contactless transaction, the bank will immediately ask for the pin. In all cases, as a responsible cardholder, it is of utmost importance the affected customer informs their bank as the first line of defence through official channels. From here on, the bank will block the card immediately and take further necessary measures to cancel the card and issue a new one.”

Furthermore, Macleod said that banks continue to encourage contactless transactions instead of physical cash.

“This is important both from a security and hygiene perspectives. Regulatory bodies across the globe are encouraging the use of digitised ways of banking – contactless transacting being the most prominent one. But, what is necessary here is that every user needs to be a responsible customer. The bank can help minimise the impact of a card loss if it is informed in time. Following this, any transaction that takes place becomes the sole responsibility of the bank. For this purpose, individuals must ensure to have their respective bank’s call centre number handy at all times.”

Sohar International witnessed a 54 per cent increase in contactless transactions between the years 2020 and 2021 meeting and exceeding market norms and trends. With direct and indirect investments into digital avenues through enhancing existing platforms, purchasing new ones, Sohar International is transforming and redefining banking living up to its promise of providing responsive banking services to help customers reach any goal.

Digital transformation is one of the cornerstones of development for global, regional and local banking sectors. The sultanate’s banking landscape has kept pace with recent technological developments, implementing advanced methods to overcome challenges posed by conventional ways of banking. With the COVID-19 pandemic, the use of mobile banking services and digital wallets is being encouraged all over the world and Oman is no different in adopting such best practices and international quality standards for corporates and individuals alike.

Today, with significant expansions in banking and economic activities within the country, the Central Bank of Oman continues to play a pivotal role in pursuing fintech-led growth, regulating policies and practices, and enabling banks to align with global trends of embracing a prudent digital economy. Such advancements come with their own set of hurdles and challenges, cyber security and data protection being one of the key ones.

The number of frauds in such transactions is close to nil according to industry data on a global level which reflects the high security and reliability such payments provide

EWAN MACLEOD