Government fights contactless payment fraud

Friday, 28 August 2009 12:00

The mobile and banking industries have agreed to a set of guidelines to keep customers safe when using contactless payment technology.

Contactless payment is familiar to Londoners who use Oyster cards on the tube network, although so far the technology has been slow to spread to retailers.

But this could soon change as a year-long trial by Barclaycard in the UK comes to an end, and the government is concerned the ability to shop without entering a PIN could leave users vulnerable to fraud.

Providers will have to ensure phones and cards with contactless payment technology are disabled quickly once reported lost or stolen and design the device so a PIN is needed if several transactions are made in a row.

Any purchases over £10 will also require PIN verification, while customers signing up to contactless payment will be encouraged to add their details on the National Mobile Phone Register to make it easier for stolen phones to be identified and recovered.

Home Office minister, Alan Campbell, said: "By working closely with industry we have already put in place measures to make it harder for thieves to profit from mobile phone theft - around 90 per cent of handsets reported stolen are now blocked within 24 hours of reporting reducing their value and the incentive for criminals.

"As new technologies like this develop we aim to consider where safeguards can be incorporated at the drawing board stage."

Dan Salmons, director of payment innovations at Barclaycard, who have been trialling the technology, said: "Contactless is the future of payments and with plans for payments to be possible via mobile phone in 2010 the guidelines announced by the Home Office will ensure that security and consumer confidence in mobile payments is further improved."

The UK is behind other countries in the development of contactless payment.

In Germany, supermarkets are trialling barcode scanning and automated payment using mobiles, while in Japan, mobiles are being used as house keys.

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