Wedded to contactless payment

The limit on contactless payments has just been raised to £30.  However, the results of our survey show that retailers think that the limit should actually have been raised to £40 - £50.  Our survey also demonstrates that 55% of retailers are planning to invest in contactless payments, including 44% of contactless payments being made using wearables.

Coming shortly before news that TalkTalk lost up to four million customer records (a figure that was subsequently reduced to 1.2 million) and the statement from RBS that most customers are unable to recover money lost to scammers, customers will naturally be concerned about the safety of their money. 

Despite public fears over hacking, most reported cyber-crimes have arisen out of user errors or traditional confidence tricks.  Provided the user retains control over the payment device, whether card, phone or wearable device, the risk should be no greater than any other card scams. Liability for losses that arise out of a technological problem will probably lie with banks or the shops, and authorisation for payments made using a device can be stopped just as easily as a credit or debit card.

A more interesting issue arises for wearable technology, where there may be no immediate security interface. In theory, this should be no different to the use of a credit or debit card. However, wearable technology is more likely to be a fashion item, such as a ring or other personal jewellery, which the owner will choose to wear to suit mood, clothes or activities.  Consequently, they are unlikely to have secure control of the device at all times.

This may sound fantastical, but Apple recently filed patent applications for an "iRing" and Kerv has already announced a contactless payments ring that could be used, for example, for travel with Transport for London.

Liability for contactless payments made with a wearable device will, in the absence of any technological fault or manifest fraud, lie with the account holder. Even with low value payments, this could add up to a reasonably large sum until the account holder notices that the payment device is missing. 

Account holders will also need to be careful which method of contactless payment is presented to the card reader. Although, the reader will only take funds from one account, this will not help the account holder avoid overdraft charges if it takes funds from the wrong one.

Personally, I like the idea of the contactless payment ring - but I shall be very careful which finger I wear it on.