The high street surge: banks and retailers must secure the expected influx of contactless payments
Art Stewart, Global Head of Sales & Marketing, IDEX Biometrics ASA
The UK Government has responded to coronavirus-conscious spending habits by further increasing the regulatory limit on contactless card payments from £45 to £100 and the multiple transaction limit from £130 to £300. While supporting end user convenience and providing a much-needed boost to a struggling high street this has, in effect, removed a vital personal verification step for billions of everyday transactions. The move risks putting speed and convenience ahead of security and means that bigger ticket items such as petrol or the weekly grocery shop, will now come under the range of instant payments.
Shoppers more exposed to theft
The pandemic has created a nation of ‘accidental savers’ according to personal finance experts, with an average of £17.5bn saved into current and savings accounts during the previous two lockdowns. While restrictions on international travel are expected to remain in some form in 2021 and consumer spending is already down, there will be a continued increase of pent-up spending. This is expected to provide a much-needed cash injection for the high street now restrictions are eased, and consumers are allowed to re-visit non-essential shops. The concerning factor is that not only will it prompt a surge in high street spending, but it will also prompt a surge in card theft and fraud.
The transaction limit increase on contactless payments means that the value of the cards we carry around in our wallets suddenly increases, in this case it’s like having a £100 prepaid card with no identity checks. Criminals are opportunistic and if the value of stealing a contactless card suddenly shoots up, it stands to reason that more will choose to exploit this vulnerability. The UK Government’s decision may be aimed at reducing our chances of contracting – or spreading – coronavirus but removing this protection to our payment cards exposes many more people to the threat of fraud and theft.
Convenience at the cost of security
Government changes have undoubtably been prompted by the pandemic, with the industry seeking to support consumers who choose to pay by contactless cards. . But these changes are unlikely to be short-term. Instead, raising expectations around convenience in payments is likely to establish longer-term habits. Therefore, this may not be the last time that we see the spending limit increased.
This poses the question; when it comes to overcoming COVID-19 vs combatting theft: need there be a compromise?
While adoption of contactless payments has understandably increased, that doesn’t mean that consumers feel completely at ease with them. More than half (55%) of consumers say that they are concerned about the security of their payment cards.
The new limits will mean that a stolen card could be immediately used by a thief many times before it is cancelled. The layer of protection has been pulled back further, making them very appealing to criminals.
These concerns are shared by the banks themselves as they will be expected to refund any money lost through such crime and are now urging governments and regulators to stagger the hikes. Suggested measures include reducing the number of times that a contactless payment card can be used on any single day to attempt to curb the risk of theft.
For the consumer, even if stolen funds are refunded, the experience of theft is extremely unpleasant and can have lasting effects. The rising threat could also be very damaging to the retail sector during an already challenging time. Therefore, as the high street re-opens it’s crucial that consumers have the confidence to shop safely, in every context.
Redressing the security balance with biometrics
When making any change to the payment ecosystem, it’s important that the industry continues to ensure the right protections are in place to keep payments safe and secure. The good news is that the payment industry is innovating at a faster pace than the widening risk of fraud and the introduction of biometric card based contactless transactions is the solution to secure and convenient touch-free shopping.
Biometric payment cards contain fingerprint sensors within the payment card itself which identifies the user and physically links them to their payment data. It offers all of the convenience of a contactless card payment, while eradicating the need for payment limits as it creates an essential ‘chain of trust’ between the consumer and retailer.
It removes any room for ambiguity as the card will only work in the hands of the registered user, providing a highly secure method of making contactless payments. It therefore meets the standards of security required to enable safe transactions and deters fraud or theft attempts because the card essentially becomes useless when not in the hands of the user.
The tipping point for mass adoption of biometric payments
Retailers are rightly welcoming any support to boost consumer confidence and numbers returning to the high street, but their future prosperity depends on efforts to maintain a high level of safety and security for shoppers. Delivering a shopping experience that is high on hygiene while minimising the threat of card theft depends on the mass adoption of biometric payment cards.
Steady progress towards the commercialisation of biometric payment cards was certainly expedited by the pandemic, with many businesses discouraging cash payments prompting a surge in contactless spending. But it’s time that banks adopted biometrics on a global scale to ensure that transactions can be conducted safely in the new contactless world.
Fingerprint sensors are as ubiquitous as proof of ID thanks to their inclusion in most smartphones as a highly convenient layer of security. As a result, fingerprint biometrics gain the most trust and acceptance from consumers. When incorporated into a payment card fingerprint biometric authentication provides a safe, speedy, and familiar way to secure payments.
As consumers return to physical stores, the demand for greater security and hygiene in the payment process is expected to mount. This demand will always lead us back to biometric card payments, so we’re now at the tipping-point when it comes to mass adoption. Banks and retailers must now step up and secure the in-person contactless payment process as consumers surge back to the high street.