Contactless payments are one of the most secure ways to make a payment, but there are a few precautions that both merchants and customers can take to prevent fraud.
Customers can protect their contactless and mobile payments using a few methods. Keeping track of their physical payment card is one of the most important: if a customer loses their card or has it stolen, a thief may be able to make contactless payments, bypassing the need for a PIN or signature. Thankfully, many financial institutions have security measures in place to detect unusual transactions, including geolocation and past buying habits. Suspicious activity often results in the fraudulent transaction being declined – or the customer being prompted for a PIN or other identifying information.
Additionally, a customer can make sure to always keep their mobile device secured with a password, and not allow any unauthorized access to any mobile device (including laptops and smartwatches) that they may use to make payments. Of course, a customer should always report any unusual activity or lost cards to their bank immediately, which will prevent the further misuse of their card.
Merchants are also at risk of being affected by this kind of fraud. As contactless payments become more common, purchasing limits are increasing, allowing customers to make higher value purchases using their contact free payment method. This means that fraudsters could make more expensive purchases using stolen cards, which would greatly increase chargebacks and other consequences for businesses. This can become costly at a large scale, and with the threat of contactless fraud becoming more common, business owners must preempt this possible liability.
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