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Are Contactless Credit Cards Safe?

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Many Canadians are confident about the safety and convenience of contactless credit cards. A 2018 survey conducted by Visa Canada showed that more than half of Canadians with credit cards used contactless cards and that 80 percent regarded them to be very convenient. Less than half of Canadians using contactless payment thought the cards were perfectly safe, however. Fewer than 10 percent of Canadians are confident about the security of other related forms of payment, including digital wallets, mobile apps, and wearables.

How do contactless credit cards work?

You make contactless payments by tapping or waving your card over the terminal. An RFID chip embedded in the card sends radio waves. RFID stands for "radio frequency identification." When you wave the card or tap it over an RFID terminal, the terminal picks up the signal and authorizes the transaction.

If you use your mobile phone to make a contactless payment, it operates in a similar way. Mobile phones equipped for contactless payment use a technology similar to RFID called NFC -- near field communication.

What keeps contactless credit cards safe?

Credit companies invented contactless credit card technology to be more secure than traditional credit cards, and more convenient. The card's limited range helps to prevent theft of information from the card's radio signal. RFID chips only transmit information for a few centimeters, making it hard for thieves to steal information from the signal.

You may have seen or heard of metal wallets or backpack liners meant to prevent thieves from stealing the electronic information on your contactless payment card. Even if thieves somehow steal the signal from an RFID card, contactless cards use EMV (Europay, Mastercard, Visa) technology which issues an encrypted security code at the time you make a transaction. The code expires when the transaction is complete. The code is good for one use only and therefore useless to thieves.

Each time you pay using an RFID chip, your information is also anonymized. Your name and banking information aren't exchanged in a way anyone could read. Contactless payment only transmits encrypted information required to make the purchase.

You will also have a low transaction limit for each purchase, unless you enter your PIN. If you do lose your card, this security feature limits how much a thief could buy in the time before you can notify your credit card company of a lost card.

Because contactless credit cards are so secure, nearly all card companies have "zero liability" policies for customers and won't hold you responsible for any charges made by credit thieves.

How can I choose the right contactless credit card for me?

Most credit card companies offer contactless credit cards, and you can look for a card and a company that combines contactless payment with the other features you want. You can use Rates.ca's comparison tool to find the company and the card that best fits your lifestyle and financial needs.