It has been announced that Halifax have begun the process of posting 25,000 contactless debit cards to a range of London based customers, in what they hope will be the beginning of a national roll out.  We have covered contactless cards in the past, these are the cards which do not require a security input for items under £10, you just flash the card past a reader.  The card also acts as a traditional debit card for larger amounts as well as an ATM card.

While the announcement will be welcomed by many retailers who find transaction costs high for smaller sales, it seems that we are taking a step back with regard to card security – surely the point of Chip and Pin (the supposed saviour of the banking system) was to ensure contact between the customer and the retail business.  The billions of pounds which have been spent on card security seem to have been forgotten in the rush to push as much through the tills as possible.

Even though the maximum amount of £10 is fairly low and will not interest all but the petty crooks, there is concern that slowly but surely the £10 amount will rise and rise until we actually arrive back at a contactless card. 

It seems as though the banking and business communities are finding it very difficult to arrive at an understanding for smaller sales, with current costs being effectively prohibitive and taking away much of a retailers potential profits – before their own cost are deducted.  Whether the contactless card will work or even be accepted is open to debate, but many believe that this is a major step backwards in the fight against the fraudster, and plays straight into their hands.