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Credit and debit card “tap to pay” limits are now higher. Should you worry?

August 21, 2020 Helen Racanelli
Credit and debit card "tap to pay" limits are now higher. Should you worry?

Amid the COVID-19 pandemic, contactless spending accounted for 52.5% of all credit and debit transactions in Canada in April, May and June of 2020, says Diab. “That number is growing week over week as more businesses [re-]open. The average transaction value over $100 is now $148,” he says.

Likewise, Interac’s contactless payment popularity is on the rise. The growth of Interac Flash use (as a percentage of total Interac Debit transactions) has almost doubled the normal growth rate in the pre-COVID period of November to March, with June seeing a 9 % increase compared to March of this year, even though the Interac tap limit remained at $100.

What are the risks for consumers?

Both Moneris and Interac assure there is no risk to either consumers or vendors with this new increase in contactless payment limits. “Merchants and consumers are not held liable for any fraud,” says Diab. For contactless credit card payments, the liability is on the credit card issuer.

Let’s say you have a Visa credit card from RBC. In the event of a fraudulent transaction, neither you, the consumer, nor the merchant where the fraudulent transaction was made would be out of pocket. Instead, the issuer—in this theoretical case, RBC—would assume liability.

Interac’s debit cards have a lower tap-to-pay limit at $100. There’s a cumulative dollar amount limit for consecutive transactions, typically of $200, that is set by the issuing bank or credit union, says Henin. “When a transaction is above either limit, the user is prompted to restart the limit with a chip-and-PIN transaction, which confirms that the user is the authorized cardholder.” Interac also has a zero liability policy, where cardholders will be reimbursed 100% for fraudulent transactions.

These limits offer protection against theft and fraud, and there are other security measures like EMV technology, a global standard that uses computer chips to authenticate (and secure) chip-card transactions.

While the volume of Interac debit transactions is growing, card fraud losses remain at record low levels, the company says. For example, in 2019, total Interac debit fraud losses as a result of skimming (a type of fraud where a gadget installed at an ATM or disguised as a point-of-sale terminal at a retailer copies your card’s magnetic strip and PIN), were $2.4 million, a decrease of 45% compared to 2018. According to Interac, this decline is a result of the industry’s investment in security features such as EMV-based secure chip processing, which protects against skimming, counterfeiting and electronic pickpocketing. Additionally, Interac works collaboratively with financial institutions, merchants and law enforcement in fraud prevention efforts.(Moneris says it does not have access to credit card fraud numbers as it is the individual card issuers that take on liability for contactless payments.)

“Contactless transactions are considered more secure because they are card-present transactions—meaning, the owner of the card should be present when using it—compared to non-card-present transactions like giving a credit card number over the phone,” says Diab.

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