Comments on Barclays to move to contactless debit as standard

This annoucement is a major breakthrough for contactless. Certainly, no one knows if contactless will succeed or if contactless will be a stepping stone on the path to broad mobile payments usage, but if it does this event be recorded in history as being among the major milestones along the way. 

In the short term I think its inevitable that contactless transactions will be "successful". Consumers want less hastle and there is a growth in low value transactions. (When originally established credit cards were an easy way to pay for higher value consumer purchases but this primarary purpose has become eroded over time.)

The problem is that for successful transactions in a secure system there needs to be both a secure transaction conduit and a unique transaction validation. Neither of these is present in a basic contactless transaction. All that is being done is that an RFID is being read. (Sometimes there is a random request for a PIN validation but this is not standard).

The result is that the card companies are balancing the risk of fraud on low value transactions versus the chance of card RFID skimming. The low values of fraud in pilots has clearly led to decisions to more widespread deployment.

The test will be whether RFID in every card will result in an acceptable balance of risk and reward. However if every card becomes a potential target for skimming then the potential cumulative rewards are likely to grow whereas the risks of detection and prosecution still remain low. If every card I encounter as a fraudster has the potential to reveal its RFID to me then I'm in clover and random PIN validation risks little.

Ten pounds isn't much these days but having to deal with hundreds of fraud reports and replacing compromised cards which have been read by people who pass within a few feet of you could create a level of hastle which the banks find unacceptable.

It would be great if RFID were to provide the solution to low value transactions. But, as in the past, we have perhaps been blinded by the benefits without being cognisant of the risks.

I've just invested in a wallet that claims to protect my cards from RFID skimming by having layers of stainless steel woven into it.

Until PayPass and PayWave offer a really secure payment mechanism I suggest you do too.