Entering a personal identification number (PIN) when buying something with a debit or credit card is, as schleps go, quite a minor one. At least you know that if your card falls into the wrong hands, the need for that PIN will thwart the would-be raider of your account.
It was that thinking that had many bank clients shunning the “tap and go” cards which started making their way into our wallets a few years BC (Before Covid).
And few of them were comforted by the fact that PINs are prompted by pay machines with purchases of more than R500, making them less appealing to thieves.
But the pandemic gave rise to more powerful fears, sparking a major spike in “contactless” payments. In a survey conducted by Mastercard of 17,000 consumers in 19 countries, 82% of respondents said they viewed contactless payments as “the cleaner way to pay”.
South Africa’s ombudsman for banking services gets only about two complaints a month about losses relating to the theft of tap and go cards, and that number has remained static for a while.
But don’t assume that your losses are limited to under R500 if your card does land in the wrong hands.
In Ray Joseph’s case, he was down R2,500 before he knew his wallet had been stolen about 15 minutes earlier.
His older FNB card was not “tap” enabled, but his Nedbank one was. And with that card in hand, the thief headed for a busy supply store near a Cape Town station, and within three minutes managed to process five payments of exactly R500 each. What they bought remains a mystery.
Joseph was alerted to the fact that a stranger was spending on his card when Nedbank sent him the SMS payment notifications. He subsequently spent a few hours tracking down the store before paying it a visit.
“Their CCTV cameras don’t work and they say that it is not uncommon for customers to do multiple tap and gos,” he told me. “They say customers ‘get angry’ if asked for their PIN.”
So they expect one to believe a bona fide customer would object to being made to enter a PIN once for a single transaction totalling R2,500, and would rather wait at least three minutes for a cashier to process five separate transactions, requiring five separate taps. Pull the other one!
“I cannot say that the shop is profiting from this kind of fraud by taking a cut,” Joseph said, “but they are definitely aiding and abetting it by their actions.”
So in effect, the limit placed on tap and go transactions is largely irrelevant.
— Ray Joseph, Nedbank client
Joseph’s main gripe is with his bank.
“I asked why it had not picked up an obvious red flag of potential fraud because of the identical amounts and very short time between transactions, and had not blocked the card,” he said.
“The response was that some people prefer to tap several times without a PIN and that they block cards only after five tap and gos.”
Because he had the tap functionality enabled on his card, the bank was not responsible for his losses, he was told.
“So, in effect,” Joseph said, “the limit placed on tap and go transactions is largely irrelevant.”
He was denied a refund.
I asked Nedbank what percentage of its clients had chosen to deactivate the tap functionality on their cards, and how common complaints such as Joseph’s were among its client base.
Responding, the bank said it takes the safety and security of its tap and go cards “very seriously”.
“As the limit is an industry standard, our clients do not have the ability to set their own limit. They do, however, have the ability to turn the functionality on or off via the Nedbank Money app.”
The system is set to request a PIN after the fifth tap transaction, I was told, irrespective of the intervals between taps.
Clearly, the thieves do their tapping as fast as possible, knowing the card is very likely to be blocked by the card owner soon.
This five-tap protection is apparently in place for Mastercard holders only — something Visa customers should be aware of.
“Most” of Nedbank’s clients choose to use the tap capability rather than deactivating it, the bank said. “But we encourage our clients to follow the same safety precautions as they would with other payment methods.”
As for refunds: “We make refunds in cases where transactions come through after card loss or theft is reported.”
If you aren’t comfortable with the idea of a thief managing to tap for purchases of up to R500 multiple times before you manage to report your card loss, or they hit the bank’s tap block, you can simply opt out of tapping.
That is, unless you’re an FNB card holder. FNB is the only bank which does not give its clients the option of deactivating their cards’ tap functionality, “as we see them as a more convenient and safer way to transact”.
That seems a bit high-handed to me, but “n the event that a card is stolen and an investigation reveals that the customer did not divulge their card information or willingly relinquish their card, the card holder may be reimbursed for the loss”.
That’s in line with protections against “unauthorised transactions” which Mastercard and Visa offer.
“As a card holder,” Mastercard says, “you will not be held responsible for unauthorised transactions if you have used reasonable care in protecting your card from loss or theft, and you promptly reported loss or theft to your financial institution.”
There are few conditions in there, but it’s definitely worth putting up a fight with your bank over them and, if necessary, lodge a complaint with the ombud.
• Contact Knowler for advice with your consumer issues via email: consumer@knowler.co.za or on Twitter: @wendyknowler
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