The combination of perceived risk of misallocated payment from contactless cards and the absence of receipt could give rise to genuine consumers querying transaction legitimacy. This could be preyed upon by first-party fraudsters who perceive a lower level of security as a means of facilitating a successful dispute.
Consider the person who has a few too many drinks at the local club and finds the next morning that they have a series of contactless transactions against their account. Without receipts and with a hazy recollection of events a customer may say "It wasn't me." If these kinds of challenges are successful, criminals could see a way of using that to their advantage.
Of course, there are other elements of the security landscape that help ensure contactless is not an open exposure. These include limits on the number of contactless transactions that can be fulfilled before a CVM is needed, plus a strong EMV chip audit trail which would mean that sequential transactions could only arise if a customer lost their card or had somehow facilitated the card being accessed and used.
Contactless may not be driving levels of chargeback, and reported fraud on contactless cards is extremely low even in maturing markets. But as the channel proliferates, it is an area that fraud management professionals should keep an eye on, especially if ill-informed first-party fraudsters see the chance to capitalise.
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