The festive season is upon us, and while it’s a time for celebration and generosity, it’s also prime time for criminals seeking to exploit the conveniences of modern banking. One such vulnerability—often overlooked—is the tap-and-go functionality on bank cards, which allows for quick, PIN-free transactions of up to R500. While this feature is a boon for busy shoppers, it’s also a gift to criminals intent on going on a holiday shopping spree using stolen or lost cards.
Recent warnings from the Banking Ombud highlight this growing concern, as complaints have emerged about tap-and-go transactions being conducted with cards that were either lost or stolen. While no direct evidence has surfaced to support the widespread claims of fraud via unauthorised scanning devices, vigilance is crucial as fraudulent activity is expected to rise during this time of year. The holiday rush, combined with the increase in card usage, presents an ideal environment for fraudsters to strike.
According to the Banking Division of the National Financial Ombud Scheme (NFO) lead ombudsman Nerosha Maseti, one of the more alarming concerns making the rounds is a voice note circulating widely across South Africa. The message claims that criminals are using unauthorised near-field communication (NFC) devices to secretly scan tap-and-go cards and steal money or card data. Maseti says that according to the voice note, fraudsters can walk by a victim, tap their card through their wallet, bag, or clothing, and make multiple transactions under the R500 limit until the available funds are depleted.
Despite these alarming claims, Maseti says that her office has yet to receive any formal complaints regarding this particular fraud method. While there have been reports of NFC fraud involving smart devices (such as smartphones and smartwatches linked to stolen card information), these cases are distinct from the concerns raised by the voice note.
Maseti also emphasises that while the tap-and-go feature is a convenient option, it is not without safeguards. "Banks set limits on NFC payments done using bank cards to reduce the risk of large fraudulent transactions," she explains. Typically, after a certain number of small-value transactions, a PIN is required to complete any further purchases.
However, that doesn’t mean customers should relax their guard. The notion of tap-and-go fraud using devices concealed in bags or clothing may still seem implausible, but given the rapid advancement of technology, it’s important to remain cautious. Even if this method hasn’t yet been proven widespread, it is not beyond the realm of possibility—and that’s a lesson in why staying vigilant is always essential.
With increased holiday spending comes increased risk, and customers must take responsibility for their own security. The National Financial Ombud Scheme has issued several important guidelines to help cardholders avoid becoming victims of fraud:
Secure Your Card and PIN: Always keep your card and PIN safe. Do not share your details with anyone, and be mindful of your surroundings when using your card in public.
Understand Your Bank’s Tap-and-Go Terms: Familiarise yourself with the specific terms and conditions of your bank’s tap-and-go functionality, including which cards are activated for NFC payments and the transaction limits for each.
Enable Notifications: Ensure you receive notifications for every transaction made using your card. Regular account statements also help you monitor any unauthorised activity.
Deactivating Tap-and-Go: If you’re concerned about security, speak with your bank about deactivating the tap-and-go functionality. Many banks offer the ability to disable this feature via their banking apps. Alternatively, you can set limits for tap-and-go transactions or opt to require a PIN for all purchases, regardless of the amount.
Take Control at Point of Sale: Always tap the point-of-sale (POS) device yourself. Never let the cashier or anyone else handle your card during a transaction. If your card is lost or stolen, report it immediately to your bank to prevent further loss.
By following these simple steps, customers can significantly reduce the risk of falling victim to fraud.
It’s crucial to keep in mind that while the tap-and-go system provides many benefits, no system is completely immune to abuse.
The onus is on customers to stay alert, understand the security features provided by their bank, and take proactive steps to safeguard their cards and personal information. As Maseti advises, "It remains important for banking customers to always be aware of the possibility of fraud and to remain ever vigilant and cautious with their bank cards and card details."
If you believe you've been a victim of fraud, don’t hesitate to report it. The Banking Division of the NFO investigates all complaints at no charge, ensuring that consumers are treated fairly by their banks. But prevention is always better than cure.
As we move into the season of giving, let’s remember: vigilance is the greatest gift we can give ourselves and our families. While the tap-and-go feature makes shopping more convenient, it’s not worth the risk of losing your hard-earned money to fraudsters. Always stay one step ahead.
* Maleke is the Personal Finance editor.
PERSONAL FINANCE