Don’t worry about tap-and-pay security in South Africa

The “tap-and-pay” method of making payments is growing substantially in South Africa.

With new payment methods, however, comes trepidation from customers in terms of their banking security.

This was heightened in 2018 when a video was posted showing a man tapping another person’s back pocket – in which they had their wallet – with a POS card machine.

SABRIC responded to the video by highlighting that such theft was very unlikely, and to get a POS device you would need to deal with a financial institution as a business.

Additionally, a percentage of all sales made using the POS device goes to the provider of the machine – meaning it would be easy to track these transactions through the machine’s provider.

The growth of tap-and-pay locally is evidence of its security, and FNB reported it processed about 66 million contactless payments in the 2018/19 financial year – nearly three times the 25.7 million payments recorded in the previous year.

The value of these payments increased from R4.5 billion to R14 billion over this period, FNB said.

Chief Executive for FNB Retail, Raj Makanjee, said that the inclusion of NFC (near-field communication) in its cards has benefited customers in various ways.

“All our customers have contactless-enabled cards, and this contributes significantly to our efforts to empower customers with convenient and safer ways to pay.”

“Our goal is to minimise reliance on cash by ensuring that customers have access to payment options that accommodate their day to day needs,” said Makanjee.

To find out more about the security of the payment method, MyBroadband asked Nedbank and FNB what their experience has been regarding tap-and-pay fraud in South Africa.

Tap-and-pay fraud is negligible

Deon Louw, Head of Card and Merchant Fraud at Nedbank, told MyBroadband that issues with tap-and-pay in the fraud environment have been extremely rare.

“Tapping to pay is a faster and a more convenient payment method. It reduces the risk of the card being compromised as the card does not have to leave the customers hand,” said Louw.

“For safety, consumers are encouraged to follow the same level of precautions used with other methods of payment, i.e. keep their card safe and PIN secret,” Louw added.

However, he warned that customers who lose or have their card stolen should immediately block the card.

“Customers are reminded that some tap-and-pay transactions may be performed without a PIN, should a customer misplace, lose or have their card stolen they should utilise the Money App or contact their bank immediately to block the card.”

Nedbank logo

Tap-and-pay fraud trends are “as expected”

FNB’s Head of Card Fraud Senzo Nsibande said the bank has witnessed an increase in the adoption of tap-and-pay transactions that is “in line with the international adoption trends for contactless card payments”.

He said that current contactless card fraud trends are also “in line with expectations”.

“Card payments, including contactless payments, are much safer and more convenient forms of payment,” said Nsibande.

“We continue to improve our technology and processes on an ongoing basis to protect our customers against all forms of fraud, including providing them with educational content via our banking platform.”

Now read: Big banks and 2FA – What you need to know

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Don’t worry about tap-and-pay security in South Africa