This question has gone viral on the internet as most users want to know whether floor limits can protect them when they use contactless payments. First, what we should know is, contactless payment is as secure as any payment system. It was created to prevent various fraud instances. However, even if there’s a fraud incident, you may not lose so much of your money. So, are floor limits enough protection?
We’ll be answering that question in this article, but before we dive right into the central part, we’ll need to explain some terms.
Everyone probably knows what this is, however, for some, the name may still seem off. Contactless payment is an easy way to pay for goods and services in stores and malls. This payment system is way faster than paying with a card that requires your PIN to work. The fantastic thing is, you can use a payment-enabled device to make contactless payments as well as some cards.
Advantages of Contactless payments
- They are the fastest means of making payments for purchased goods or services rendered.
- For security reasons, you’ll need to input your PIN after every fifth transaction you make. This step checks that you’re the real owner of the card.
- According to the EU, contactless payments are as secure as any other viable payment system.
- Payment-enabled device may possess an additional verification requirement, which may be a Face ID or fingerprint. Thus, you can authenticate your transaction with a face ID instead of using your PIN.
- All purchases made with a contactless payment system are recorded and monitored on your statement.
- For payment-enabled devices, the transactions are monitored in the application you use for payment.
Disadvantages of Contactless payments
- Sometimes, your transaction might be unsuccessful.
- There’s a spending limit in contactless transactions.
- After every five successful transactions using the contactless payment system, you may need to verify your PIN again, and that could be stressful.
- Card clash can occur if multiple cards get presented at once.
You can get around the first and the second disadvantage of contactless payments by using your card and authorizing it with your PIN. Contactless payment is secure, but are floor limits sufficient protection for it?
Floor limit is a regular term for individuals who use credit cards. A floor limit isthe highest authorizable sum of money for credit card transactions. It simply means the maximum amount you can purchase using your credit card. However, every store has its floor limit.
Nonetheless, floor limits may not work for debit cards since debit cards only allow you to withdraw the exact amount of money in your account. Furthermore, a debit card requires verification at all times, thus discouraging the user from overdrawing.
How to UseContactless Payment Systems?
Using contactless payment is quite easy for those who possess a payment-enabled device, all you need to do is to hold it next to a contactless terminal, and this gesture will allow you to make payments easily. Some devices may require you to touch the terminal with the device.
Now, let’s go straight to the point; the question is, are floor limits enough protection for contactless payments?
Floor limits are for protection but not enough security for contactless payments. You’re probably wondering how it protects you?
Every store or country has a limit for its contactless payment system, and most countries use a limit of 50 Euros for their contactless payment. Before you can start using contactless payments, you may be required to use your card for the first time, and that would require your PIN.
It’s a step that verifies the owner of the card. After your first payment, you can start using contactless payments with the limits attached.
These limits are there for your protection against fraud.
If thieves steal your card for a contactless transaction, they can’t go above the limit. That way, all your funds won’t get wiped off from your account.
Another way a contactless payment system can protect you is by requesting your PIN after a couple of transactions, say, four or five transactions. In that regard, it’s just as safe as your debit card and other cards as well.
Now, the issue with floor limits is that bank accounts can get overdrawn even when the customer doesn’t possess a verified overdraft.
Therefore, floor limits do not provide 100% protection, but the feature can protect you from frauds and help reduce the risk of being liquidated.