While contactless credit cards are fairly secure, this doesn’t mean that they are risk-free. Their security is provided by a secure chip, changing transaction data, and fraud checks by the issuer.
There are also differences between various types of contactless cards. A bank card, hotel key, access badge, and simple NFC card all use different chips and authentication mechanisms. The following guide covers the risks and information that businesses should consider before selecting a card system.
Are Contactless Cards Secure?
Contactless debit and credit cards use EMV chips, the same basic security measure used when inserting the card. During a contactless transaction, the terminal calculates the transaction value, and the chip generates new security data for that transaction.
For online processing, the payment network and issuing bank verify the transaction before authorization. Transactions made through transport, parking, and offline terminals may be stored until they are submitted.
A lost or stolen legitimate card may still be used for low-value transactions without a PIN. Payment alerts and prompt card blocking help minimize such risks.
What Makes Contactless Cards Secure?
Unique Transaction Cryptograms
A cryptogram is created separately for each transaction. It’s generated using information about the purchase, terminal, card counter, and protected key. A code taken from one transaction will be useless for authenticating any other transaction.
Secure Chip and Protected Keys
A payment card has a protected chip rather than a standard RFID tag, and its keys remain in secure memory, beyond the reach of any phone or NFC reader. Without the keys, the reader cannot generate the correct authentication code for any future transaction.
Anti-Replay Protection
EMV cards generate new data for each transaction. In case of an online transaction, the issuer evaluates the cryptogram, card counter, amount, merchant, and transaction history. Captured data is no longer useful if it doesn’t match the current transaction.
Short Communication Range
Contactless payments usually take place within a few centimeters of the terminal. Special antennas can increase the range. A relay device can relay live communication between a contactless card and the terminal over a considerable distance without stealing the data stored on the chip.
Cardholder Verification
For small purchases, a PIN might not be required. However, losing a contactless card can be risky because no identification is required in most cases. A PIN may be requested depending on the number of taps, the amount spent, or other criteria set by the issuer.
Issuer Fraud Monitoring
For online purchases, the bank will verify the transaction amount, merchant, location, card status, and transaction history. Routine transactions should be processed instantly; however, several quick transactions in a foreign country may require additional steps.
What Information Does a Contactless Card Transmit?
The information that a contactless card transmits during a normal tap consists of the account number, expiration date, transaction information, and the security code generated for that particular transaction. The PIN, printed CVV2, and chip key aren’t shared by the contactless card.
No new payment information can be generated without the secure key. There isn’t much information that EMV doesn’t share; rather, EMV keeps the transaction secure through dynamic authentication, card authentication, and issuer controls.
What Are the Real Security Risks of Contactless Cards?
The most obvious security issue with contactless credit cards occurs when a card goes missing. Low-value transactions may continue until the issuer freezes the card, requests authentication, or detects suspicious activity. Freeze the card immediately once you realize it’s missing.
Tampering with a terminal may result in an incorrect amount being displayed, card information being stolen, or the transaction being forwarded. Always check the machine’s display before using a new or unfamiliar card reader.
Relay attacks are carried out by transferring live information from a real card to a remote terminal. They require specific tools, skills, and access to a legitimate payment terminal, but they don’t create a copy of the card.
Passwords and one-time codes used to activate mobile wallets are also targeted by scammers.
Can Contactless Cards Be Skimmed or Cloned?
Some contactless cards can be read by a reader device at close range. This is known as contactless skimming; however, simply reading card information doesn’t allow cloning.
The initial reading doesn’t allow the extraction of sensitive information such as the PIN, CVV2 number, chip encryption key, or the generation of new cryptograms. Magnetic stripe cards use static data, while EMV contactless cards generate dynamic cryptograms for each transaction.
Some vulnerabilities associated with particular payment systems, card types, protocol versions, and terminal configurations have been identified. However, they don’t allow an NFC phone to clone a bank card.
Are Mobile Wallets Safer Than Contactless Cards?
Most often, yes, provided that your smartphone has a robust screen-lock feature and the mobile wallet uses tokenized credentials.
It transmits a device token instead of your card number. Regular transactions require a passcode, fingerprint, or facial recognition, although some express travel options don’t require the screen to be unlocked. Compatible devices can be remotely locked or wiped in case of theft.
Phishing attacks, account takeovers, and unauthorized wallet activations pose the biggest threats. Reject any activation attempts you didn’t initiate, and never share the verification code sent by your bank.
Are RFID-Blocking Wallets Necessary?
Most people don’t need an RFID-blocking wallet to carry an EMV payment card. It’s designed to block close-range signal transmission while the card is inside the wallet, but it doesn’t prevent phishing, password theft, tampered terminals, or physical card theft.
You may use one if you want additional protection against close-range scanning.
How to Protect Your Contactless Cards
Follow these tips to minimize potential risks:
- Enable instant payment notifications.
- Verify the payment amount.
- Keep the card within sight.
- Freeze a missing card immediately.
- Monitor small transactions.
- Avoid damaged terminals.
- Don’ t share your PIN or one-time code.
- Make sure the banking app is up to date.
- Block devices connected to a mobile wallet.
If an unusual transaction happens, freeze the card, review recent transactions, and contact the bank.
Are All Contactless and RFID Cards Equally Secure?
No. “Contactless” just means contactless communication. Security is provided by the chip, authentication process, keys, reader, and back end.
| Type of Card | Security Provided |
| 125 kHz card | Fixed ID |
| NFC memory card | Read/write memory or password protection |
| Secure smart card | Key protection and mutual authentication |
| EMV payment card | Transaction cryptogram |
| Mobile wallet | Token and device authentication |
A fixed-ID card transmits the same ID number with every read. A forged credential will allow entry through a door if the system checks only that number.
Secure smart cards involve verification of both the card and the reader. Basic identification may be enough for a gym card, but secure smart cards are necessary for a server room badge.
How Businesses Should Choose Secure Contactless Cards
Consider the threat level. One-time event tickets can use basic identification. A data center badge requires secure key management, strict access policies, and complete audit trails. Similarly, hotel room keys should be deactivated immediately when guests check out or when a key is lost.
Select the chip based on the information the card stores. RFID/NFC contactless cards are suitable for low-security identification. For financial transactions, sensitive information, and restricted access areas, protected keys, mutual authentication, and secure server verification are required.
Key management is equally important. The use of default keys, shared keys across sites, and active credentials that should have been deactivated will significantly undermine security.
Before manufacturing large batches, the card must be tested with the reader and software under real-world conditions.
Frequently Asked Questions
Are Contactless Debit Cards as Secure as Credit Cards?
They can be equally secure because both may use EMV chips and transaction codes. Fraud protection and refund conditions depend on the card issuer, account type, and country.
Can Contactless Cards Work Through a Wallet?
Yes, but only through a thin wallet or phone case. Metal, RFID blockers, and multiple cards can obstruct the signal. Multiple cards can also cause card clashes and prevent payment.
Can Contactless Cards Be Tracked?
No. Contactless cards don’t have GPS and cannot track their current location. Access systems and banks may keep records of the reader, merchant, time, or place where the card was used.
Does Aluminum Foil Block Contactless Cards?
Yes, if the card is completely wrapped in it. Holes, tears, or loose wrapping may allow the signal to pass through, so this method isn’t reliable.
What Should I Do After an Unauthorized Contactless Payment?
Freeze the card and contact your bank immediately. Check recent transactions for any unauthorized purchases. Change your password if necessary.
Conclusion
Contactless cards are safe for general use. Transaction data generated by EMV chips is unique, while issuer authentication helps identify suspicious transactions. The biggest threats include lost cards, tampered terminals, and scams.
Securing business cards requires the following features: a secure chip, authentication, key provisioning, and compatible readers. JLTRFID assists companies in choosing and testing cards with appropriate security features. Contact JLTRFID for more information and assistance in selecting a suitable solution for your particular application and readers.
