Australian authorities may force domestic banks to create an ‘opt-in’ function that requires customers to consent to the activation of contactless payment technology following a reported increase in fraud on low-value payments via stolen cards. A report provided by police authorities in Victoria (a region within Australia) says there has been a ‘significant increase’ with 100 extra credit card thefts and use offenses per week due to contactless payments.
In a report submitted to the Australian Parliament, Victoria Police argued,
“The major banks provide a Zero Liability Policy to customers who are victims of fraudulent transactions. This policy is clearly advertised in conjunction with ‘Tap and Go’ technology. Widespread promotion of the Zero Liability Policy is expected to motivate offenders who are likely to see that the victim will not be at a personal loss.”
While authorities are clearly raising one of the key issues with contactless NFC technology, the increase in card fraud in the lost and stolen card fraud category was about AUS$100,000 (USD $70,000) out of AUS$400 million (USD $279 million) overall, suggesting that calls to potentially limit the effectiveness of contactless payment technology are overblown. Australia is already one of the international leaders in consumer contactless adoption and handicapping its growth by implementing an opt-in function will not benefit contactless cards over mobile payments at the POS over the long run.
Oveview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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