The change to contactless is not the same as the change to chip and pin

Possibly the biggest PR disaster of the year hit the contactless payments industry last week in the form of complaints to the BBC's Radio 4 show, Money box. Covered by just about every major news source in the UK, the show featured a myriad of complainants, all of whom have had their contactless cards debited by mistake when trying to pay with another card and, inexplicably, one woman who managed to pay twice, once with the contactless card and then again with her chip and pin, writes Billy Bambrough

Possibly the biggest PR disaster of the year hit the contactless payments industry last week in the form of complaints to the BBC’s Radio 4 show, Money box. Covered by just about every major news source in the UK, the show featured a myriad of complainants, all of whom have had their contactless cards debited by mistake when trying to pay with another card and, inexplicably, one woman who managed to pay twice, once with the contactless card and then again with her chip and pin, writes Billy Bambrough

The majority of complaints on the show were levelled at retailer M&S, not surprising as they are the UK’s forerunner in contactless payments, having rolled it out in all 600 of their stores and processing 250,000 payments a week using the technology.

While the complaints that are coming in seem to be a few and far between (M&S have received just five complaints in the year since its been accepting contactless payments) the news has sparked fears that contactless cards are a security disaster waiting to happen.

Many commentators have been wildly speculating that we will be soon over-run by criminals using smart phones in crowded areas to take money surreptitiously from people’s cards every time someone bumps into them. I’m not clued up on how the tech works in these cards but I find it hard to believe that banks will have allowed these sorts of security breaches to be possible, knowing that if the worst happened they would have to pick up the bill.

Although I am not entirely sold on the need for contactless payments in the western world (is it really that much better to pay in 2 seconds when before you paid in 8?) it’s difficult to imagine banks back-tracking now. According to Visa there were 19m contactless transactions carried out in Europe during March, what the guys at Visa have optimistically called a "watershed moment" for contactless payments.

The reason these people had cause for complaint is that they weren’t familiar with the technology they were using. The people taking the payment have not been trained and the card holders have not been informed. To someone who uses a contactless card to pay regularly they will be wary of moving their NFC card close to the reader. Someone who doesn’t even know they have a card capable of doing this won’t be so careful.

Chip and pin was straightforward. Consumers and retailers and been using ATMs in a very similar way for a long time and the conversion was minimal but NFC payments may take a little more getting used to and require industry players being far more proactive.

When reports like this hit the nation media it’s highly unlikely to turn the trend tide but it will slow it down. All of these incidents could have been avoided by people who knew what they were doing and it’s time banks and retails stopped just expecting this to happen on its own.