Pros and cons of PIN-less pay systems
Published Wednesday, April 17, 2013 5:54PM MDT Last Updated Wednesday, April 17, 2013 6:40PM MDT
Most debit and credit cards already have microchips imbedded in them and by 2015 all merchants must have chip readers in their stores.
Interac and the banks say the chip-plus-pin number system provides better protection against counterfeiting yet it is those same chips that now allow purchases to be made without a PIN number.
All the customer has to do is wave their card in front of the reader and presto, purchase complete.
But not all consumers want the convenience of waving and walking away and many feel the system is just not secure.
Debbie Cochlan says she handed her debit card to the Tim Hortons cashier and was expecting to get the PIN pad back to enter her number.
Instead the cashier waved her card at the pad and moved on to the next customer without giving her a receipt.
"I said well how do I know that, I mean can't you show me anything? You can't give me any proof that that's what you did? And she said, well no, and I said why did you do that without my permission? And she said my manager said we could,” said Cochlan.
Cochlan says the manager told her that's how they always do it and that it is perfectly safe.
She told the manager that the clerk should ask first as she doesn’t use the contactless systems and says she doesn’t think they're as foolproof as the banks say.
"I don't know what they're doing, I don't know how many times they tapped it. I don't know if they tapped if for extra money,” said Cochlan.
CTV Calgary’s Consumer Specialist Lea Williams-Doherty stepped in and asked the manager of the Douglasdale Tim Hortons if his cashiers ask permission before waving the cards. She also inquired about whether they provide receipts for contactless transactions.
The manager referred Lea to the company’s corporate office.
A spokesperson says company policy states that customers should always be given the choice of using the PIN pad or FlashPay and guests should always be given a receipt if they request it.
Cochlan questions whether the added risks of FlashPay are worth the touted benefit.
"How fast are we in society that we can't take the time to enter our PIN number for our coffee or our French fries and hamburger,” said Cochlan.
According to Interac's website, so far only RBC, Scotiabank and TD Bank are participating in FlashPay.
RBC sends out all new debit cards flash enabled but clients can ask to shut that feature off. The same applies to TD Bank customers.
At Scotiabank, clients will be asked if they want to opt in or out of the FlashPay feature.
Lea also looked into limits for the automatic authorization of each FlashPay transaction and found out that it is $100 at grocery stores and gas stations and $50 at other stores.
Interact and the banks say clients don't need to worry about others using their card without permission or a PIN number because clients don't have to pay for unauthorized transactions.
Lea says people who do use the system should be vigilant in checking their statements to ensure they are not being billed for unauthorized transactions.
(With files from Lea Williams-Doherty)