By Oliver Smith on Thursday 12 September 2019
Strong Customer Authentication threatens to derail the contactless revolution, but Apple and Google boosted by the change.
Digital banks including Monzo and Starling wrote to customers this week to notify them of new rules which will increase the amount of friction in making a contactless payment.
Now every five contactless payments, or after a certain value of payments has been reached, your bank card will be declined and you’ll be asked to enter your PIN instead.
The change doesn’t just affect digital banks, but all banks, and comes about as part of the introduction of Strong Customer Authentication (SCA), a new European regulation intended to increase the security of payments.
As Starling Bank explained: “After you’ve made five contactless payments in a row (or once your payments have totalled £135) your card will now decline and you’ll be asked to enter your card in the machine and enter your PIN.”
The change, which is officially introduced on 14 September, is expected to cause much confusion both among consumers and retailers, many of whom won’t be aware of the new rules.
Monzo wrote to customers: "This is a big change for retailers, so the shop won’t necessarily know why your card is being declined. But when the reason is an SCA security check, we’ll always send you a notification from Monzo asking you to retry the payment with Chip&PIN."
For those unaware, the PIN check will appear as a randomly rejected transaction, which could encourage to people to simply stop using contactless payments.
Disruption will be highest in cities like London, where contactless has become the default payment method in many stores.
Interestingly there are some exemptions to the new rules, including unattended payment terminals like those used in car parks and on public transport.
All Apple Pay and Google Pay transactions are also exempt, due to the existing biometric security involved in making those payments, meaning SCA could be a boost for the adoption of these digital wallets.