THOUSANDS of consumers are enduring the embarrassment of having their contactless payments declined because of a new and little-known rule, an expert has warned.
Contactless technology has revolutionised the way everyday payments such as groceries, shopping or hot drinks are made.
But the risk of fraud means banks and payment providers have strict terms and conditions that many customers may not be aware of, leading to red faces at the tills when their cards are declined.
In September, the new EU Payments Services Directive 2 (PSD2) came into force and brought new laws to enhance online payment security and consumer rights.
The new directive limits the number of contactless card payments customers can make to five before needing to verify their payment.
To prevent misuse, card service providers have implemented strict rules on how contactless cards can be used, including a £42 (€50) cap per transaction and limiting the number of payments a customer can make without entering a PIN.
Payments in an unusual location can also make banks think the card may be being misused.
Christo Georgiev, CEO of payment solutions company myPOS, explained how customers can avoid making one of the most common mistakes since the new rules came into place.
He said: “No doubt, Tap and Pay is more convenient than any other payment method available today and customers love it. Indeed, there is a recently introduced limit of 5 consecutive taps without PIN to prevent your card being used by someone else without your permission and this is good for your security.”
“You shouldn’t panic when your card is declined once the limit has been reached, just continue using your card but make sure you enter your PIN to complete the transaction. Then you can enjoy another 5 payments without PIN up to £42 each. “
“Furthermore, businesses should inform their customers that from time to time they should be requested to enter their PINs in order to continue using their cards as there are new contactless payments rules in place.
“As a leading payment service provider for merchants, we notified all our merchants across the European Economic Area about this new rule, so that they are prepared and do not miss a purchase. ”
With an estimated 112 million contactless cards in the United Kingdom, contactless payment systems such as bank cards or mobile phones now account for one in three payments in the United Kingdom.[IS1]
Many customers find them faster and more convenient than alternative payment methods such as cash or Chip and PIN.
However, the ease of use leaves the technology vulnerable to abuse as it does not require security checks such as a personal identification number.
PSD2 was brought in to regulate payment services across European Union countries and has been in full effect since the 14th of September.
myPOS is a leading payment services provider that works with businesses of all sizes to provide innovative solutions to sell their products and services.
It is the only payment technology provider to deliver a free merchant account with immediate payout of funds 24/7/365 at no extra cost.