A post relating to this item from Finextra:
27 June, 2008
UK study highlights fraud fears over contactless cards
Over three quarters of Brits fear the introduction of contactless payment systems will leave them exposed to fraud, according to a new survey.
The adoption of contactless cards is another step towards a cashless society. The convenience factor comes at a price though and according to this study, it's the fear of fraud - but is this fear unfounded? Perhaps the advertised success of Chip and Pin
is threatening the growth of contactless payments? Certainly, providers, be they prepaid or credit/debit contactless cards, will need to educate the public in the same way as we were educated about Chip and PIN. This communications exercise, to dispel urban
myths such as "brushing past an in-store reader will debit the card with an unwanted purchase", will need to be backed up with robust fraud prevention and detection capabilities. Why? It's down to reputation. Fraud, or potential exposure to fraud, significantly
harms a firms reputation – and reputation is what trust is built on. It's not only consumers who are concerned, but shareholders too. Leaving customers open to fraud would indicate a lackadaisical approach to management and, potentially, a company unworthy
It is up to the industry, and in its best interests, to ensure that cardholders are protected. In protecting customers from fraud they are in effect protecting themselves from a loss of reputation. The more robust their prevention/detection and analytical
capabilities are, the better their chance of retaining customers and thus the greater the chance of delivering shareholder value.