Barclays Launches Contactless Debit Card
From March, all new Barclays debit cards are to be equipped with contactless technology. But what exactly are contactless payments, and more importantly, how safe are they?
At the risk of sounding nerdy, technology excites me. So when Britain's third-largest bank, Barclays announced it was extending contactless technology to its Visa debit cards, you'd think I'd be jumping at the chance to write about it.
Trouble is, contactless payments haven't really taken off in the UK, and for all the hype surrounding the technology, its launch - in this country at least, has turned out to be somewhat of a damp squib.
In theory, contactless payments seem like a good idea. After all, they work in exactly the same way as a regular credit or debit card, only instead of sticking your card into a chip and PIN device, you simply tap your card onto a special reader at the till for transactions up to £10.
As there's no cash involved, payments are quicker and queues are shorter, meaning impatient Londoners like me are less likely to go into cardiac arrest while standing in them.
Barclays is already a pioneer in the contactless world, launching its OnePulse card in September 2007, a 3-in-1 credit card combining contactless and Chip and PIN technology with an Oyster travelcard, which millions of Londoners already use to get around the capital.
Barclaycard now has around one million contactless cards in circulation. With the new Visa debit cards that will be issued from March, the bank predicts there will be an additional three million contactless debit card customers by the end of the year.
But despite these impressive numbers rolled out by Barclays, why has contactless failed to make a splash so far in the UK?
Needles in haystacks
The answer is simple. There's just nowhere to use them!
I don't know about you, but I've only ever seen a couple of contactless payment points while out and about - and I work right in the centre of London. After all, it's all very well to have one of these snazzy little cards, but if there's nowhere to use it, the contactless facility is rendered redundant.
There are currently 8,000 retailers which accept contactless payments, with stores including Books Etc, Thresher, Eat, Yo! Sushi, Krispy Crème and Coffee Republic all signed up.
However, it's been over a year since the launch of OnePulse, and Barclays has failed to live up to the initial target of 20,000 outlets announced last April. So, while the banks may be raving about contactless technology, it seems retailers have a lot of catching up to do.
An even bigger concern raised about contactless is what happens if your card is lost, stolen or misused by a third party.
This interesting story in the Guardian highlights how contactless technology could be a potential fraudster's paradise, allowing criminals to get their mitts on your to your precious cash.
Although APACS admits that it is theoretically possible for a fraudster to read data from a contactless card, it stresses that the limited information stored on that part of the card would not be enough to clone it.
They also add that from time to time you will automatically be prompted to enter your PIN as you would do on a regular transaction, as another measure to prevent misuse.
It's important to remember that fraud guarantees for contactless payments are exactly the same as other cards, and as long as you haven't acted fraudulently or negligently, you will be refunded for any losses incurred.
Besides, with the £10 limit imposed on contactless transactions, my guess is scamming skinny lattes and croissants aren't exactly top priority for those hardcore fraudsters.
Reassuringly, APACS says that so far there have been no reports of fraud losses attributed to contactless capability. Just remember if you are a Barclays bank customer and you get a new debit card from March this year, you'll need to check your statements regularly for any erroneous transactions. Be sure to report them - however small, they don't belong to you.
So, whether you think contactless technology is a good or bad thing, you'd better get used to seeing more of those terminals. Although not mainstream at the moment, where Barclays have led, others will surely follow.
I'm not sure if we'll ever become a cashless society, or if contactless shopping will really take-off - but one thing is for certain. With all Barclays debit cardholders able to make contactless transactions from March, contactless technology is slowly, but very surely here to stay.