/ Money

Are small payments a big problem for contactless cards?

NatWest debit card with contactless symbol

Contactless cards have yet to take off in a big way. But is that because people are reluctant to use the technology? Or is it due to retailers setting arbitrary ‘minimum payment’ limits that clearly defeat the point?

My bank, NatWest, emailed me this week to tell me it was sending out a new debit card capable of making contactless payments. Thanks very much – but I was happy enough with the old card. I suppose it may come in handy on occasions, but I’m still mainly a ‘cash man’ for small purchases.

This comes following the news that HSBC is issuing contactless debit cards to its customers, so that they can pay for goods with just one ‘tap’ at the Olympic Games. HSBC has also said that customers who don’t want this type of card can opt out by contacting their local HSBC branch.

A problem with minimum payments

One potential problem with contactless cards that recently came to my attention is minimum payments. A Which? Conversation reader emailed us to say that they’d tried to use their contactless Visa card at the branch of a popular high-street bakery, but was told that there was a £2 minimum spend.

He was then told at another branch of the same bakery that there was a minimum spend of £3. When he contacted their head office, it told him that company policy was to enforce a £3 minimum spend.

Our persistent reader then contacted Visa and was told that ‘Visa merchants are not permitted to establish minimum transaction amounts, even on sale items’. It seems that shops are setting their own minimum amounts, which could be putting people off from using contactless cards.

Overall, minimum payment policies appear to defeat the main appeal of contactless cards – not having to carry around pockets full of coins.

Contactless cards don’t catch on

This reader’s story comes on the back of research from Mintel showing that people are fairly reluctant to use their contactless cards and many are unsure whether they even have them or not. The research highlighted that only 25% of contactless card holders ever using them to make payments.

So why do you think people are reluctant to use their contactless cards? Have you had your contactless payment turned down because the total amount was too low?

Chris says:
17 November 2012

I use my contactless card regularly I love it and hate it, So convenient, but worked out I actually spend more. So far I have not come across any companies asking for a minimum charge, this is usually only if it is not a contactless payment transaction. I do worry about the fact it could be open to abuse, by someone with a portable scanner. The way technology is moving these days, there is probably an App you can get for a smartphone, so watch out for anyone pretending to take a call on their phone by your right buttock (Thats where I keep my wallet)

I wouldn’t keep your wallet there as it might get stolen Chris! By the way there is no smartphone app which can read the encrypted part of your contactless card. as far as I am aware there is also as yet no smartphone which has the necessary hardware to read a proximity card.There are however RFID card readers which can be attached to smartphones and eventually there probably will be smartphones which can read these cards but all that would achieve is to get the same information printed on the card and available by theft of the card from your back pocket. I would however be suspicious of someone scanning a phone near my pockets!

The Grabba RFID Readers are card reader attachments for PDAs and Smartphones, reading several different types of contactless RFID cards, chips and tags. The Prox Reader can read all HID Proximity Credentials; cards, tags and fobs. The RFID Readers are being used in wireless and remote security systems, in asset management systems and many other mobile identification systems.

mike-wsm says:
28 April 2013

This technology has an inverse twelfth power law, the performance drops four-thousand-fold every time you double the separation. So anyone trying to use a scanner would have to use megawatts and would microwave your bum before they could read the card. It really is secure, physical contact only, no probs.

And the Titanic was unsinkable.

Very sadly, the adage “where there’s a will, there’s a way” is never more true than in the capacity of the dishonest and greedy to make technology work for them and against the innocent / gullible.
The chances of current technology allowing fraudulent use of a contact less card **may** be slim, but with each and every new challenge the fraudsters come up with faster and faster ways to get their way.

The only failsafe solution is not to have the cards. The only **reasonably** safe solution for anyone actually wanting such a card is ever increasing vigilance.

We live in a sad world where it is increasingly difficult to be trusting.

I do not know any way of conducting financial transactions that is completely safe, whether the danger is fraud or theft. It is a case of weighing up the convenience and risk.

I was surprised when some Tesco filling stations introduced card-operated pumps that did not require a PIN, allowing anyone to use a stolen or borrowed card to buy up to £60 worth of fuel. That is daft and I was not surprised when new pumps requiring a PIN were installed.

I want to evaluate the risks of contactless cards before using them, and if one arrives in the post I have no intention of using it for the time being.

Good to see you back, Dave.

Robhingston says:
17 October 2014

Told in my shop min spend £6, and they wonder why it’s not taking off … Let the banks not charge so much and it will take off , shopkeeper told me he as to pay the bank £1 for each transaction , that’s why it’s a min of £6. £1 is a bit much, 15p per transaction would seem more fair then the small shopkeeper won’t have a min spend and then it might replace a lot of cash that is moved around. Think visa think

David Il says:
21 July 2015

Used my contactless and only checked the receipt after I’d got home only to notice that it said 30p more than the item purchased.
On returning to the shop next day I queried the bill only to be told there was a 30p charge for sums in excess of £5 and 50p for those less than £5. Nowhere in the shop was there a sign warning of the additional charge.
Be warned and ask first 🙂

Adding transaction charges is an illegal practice in UK.
From 13 January 2018, you can’t be charged extra for using a credit or debit card. If you’re charged more, you should complain to the trader and ask for the charge to be refunded. If that doesn’t work, you can contact the Consumer Helpline –