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Contactless credit cards: future or folly?
Jack Han investigates the new wave of shopping technology with contactless credit cards.
January 20, 2010
Millions of credit cards with new technology have rolled out onto the Australian market and into our wallets. Many experts have heralded the contactless credit card as an evolutionary step in card technology, allowing us to pay for small purchases in more convenient ways, while others are raising concerns about the vulnerability of these cards to skimming and other cyber crimes.
Contactless credit cards have already been distributed to more than three million Commonwealth Bank customers, in partnership with MasterCard, while ANZ, Macquarie Bank and National Australia Bank customers will soon be offered contactless Visa credit cards.
Growing popular in the US and the UK, these new credit cards are becoming more and more widely accepted here in Australia, with thousands of outlets, such as 7-Eleven, accepting this payment option.
They are designed to provide a convenient alternative to cash for shoppers who normally resist using credit cards for smaller, everyday purchases. By simply scanning or sliding these cards at the cashier, many Australians have discovered a new, hassle free way of shopping.
Even though it is estimated that cash transactions make up 65-70 percent of the total transactions in Australia today, contactless credit cards could be the technology that replaces cash for good.
Many contactless credit card users may not be aware that their cards contain the new technology, which has sparked fears that thousands of Australians have become vulnerable to new forms of card skimming.
While financial institutions deny that the cards are more vulnerable to skimming than their old counterparts, in the United States, a study conducted by researchers at the University of Massachusetts demonstrated how easy it was for criminals to transfer data off of contactless cards. Using readers, the team was able to effectively steal card numbers, expiration dates and cardholders' names.
So how can you protect yourself from the new wave of card skimming crimes? The most useful thing to do is learn about your card from your provider. By learning about your card’s anti-skimming features, you can determine whether a contactless card suits your lifestyle, and whether it is a suitable alternative to carrying cash in your wallet.
Chances are your credit card could already be equipped with the latest in electronic payment technology. But before you shop, look around online for the best rates and features to see if your high-tech card really measures up to all that 2010 has to offer.
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