The country manager of Visa Bangladesh, Nepal and Bhutan explains it all

Today, banks and non-bank financial institutions are increasingly promoting contactless credit and debit cards, which allow users to simply tap their cards at payment terminals (point of sale/POS.) 

They can transact without contact with cashiers or handing over their card during in-person purchases. 

A report published last year says there were about 450,000 contactless credit cards in circulation in Bangladesh[1]. 

And this number is growing since the recent regulations allowing contactless transactions on debit cards. 

Yet, many new consumers are wary of adopting this technology due to misconceptions. 

 Here are some common myths about contactless transactions. 

Someone can tap a terminal on my wallet and steal money from my card

This is one of the most common myths about contactless cards -- that people equipped with POS terminals can tap and access information from the card. 

Every POS terminal is tagged to a KYC-compliant merchant who has received the terminal from his/her bank, and activity here is continuously monitored by fraud detection tools. 

Although some smartphone apps can read some data (i.e.: account number, expiration date) from a contactless card, there are inbuilt security mechanisms to prevent fraudsters from accessing all information needed for a transaction. 

This data is also encrypted, reducing the possibility of fraud.

Once the money is gone, it’s gone

The risk of untraceable crime is eliminated with contactless cards, since users are notified via SMS on every card activity. 

On loss or theft of a card, if the cardholder notifies their issuer, the card can be blocked immediately and there are redressal mechanisms to retrieve the amount. 

Also as mentioned, only a genuine POS given by the acquiring banks can communicate with the card, so any unsolicited use would get flagged by the processing network. 

Contactless cards can be cloned

This, in reality, is far from the truth. For every card transaction, a one-time, unique encrypted number is communicated between the card and the terminal. 

Even if a perpetrator did somehow obtain the required information, they would not be able to complete the process because of missing the one-time code feature. 

Similarly, there are numerous other layers of security that protect contactless transactions.

Some people also think that in addition to stealing the data of the card, fraudsters can steal the cardholder’s identity and use it for crimes. 

In reality, contactless payment cards do not transmit personal information such as name or address, averting the risk of identity theft. 

For this concern, card providers can choose to offer ID theft alert services as well.

Tapping to pay is less secure than dipping or swiping 

Some believe that contactless cards pose a larger security risk than regular payment cards. 

However, contactless security is far more robust than other cards, as EMV chip cards use a smart microprocessor chip technology to safeguard the credentials and secure the communication with the POS terminal. 

Unlike magnetic strips earlier used in cards, chips are incredibly difficult to clone, making EMV cards far less vulnerable to fraud. 

Also, one can tap without the card ever leaving one’s hand hence retaining control of the card with the user.

Despite these misconceptions, contactless cards are increasingly popular among consumers and merchants across countries. 

Shoppers no longer have to enter their PIN (up to a certain amount) or handle cash, which speeds up the payment process for consumers and cashiers. 

Moreover, as EMV contactless cards are so ubiquitous overseas, it is possible to tap and pay at numerous places when travelling abroad. 

Contactless payments offer many benefits to shoppers and retailers alike and are highly secure. 

Bangladesh is embracing this technology to not only empower people with innovations but help them be in charge of their payments and accelerate the pace for reaching its national objective of Vision 2041 -- a Smart Bangladesh. 

The author is country manager of Visa Inc for Bangladesh, Nepal and Bhutan

[1]   https://www.thedailystar.net/business/economy/banks/news/contactless-cards-gaining-traction-amid-covid-digital-push-2177101