Five Questions About: Contactless cards

Contactless? How does that work?

You simply need to wave your credit or debit card on a reader to make a payment. It saves the time of having to put in a PIN when you're spending small amounts. London's Oyster travel cards use similar technology.

Ah, so they aren't new?

Not all at. The first contactless cards in the UK were launched in 2007 and there are now more than 23 million cards in use across the UK.

So why are we discussing them now?

Two bits of news this week. First, the amount you can pay on a contactless card has been increased to £20 from £15. The reasoning behind that is that the extra fiver will make the cards more useful for a small basket of groceries. Second, the Post Office announced it is putting in contactless payment terminals in its 11,500 branches.

Will that cut down queues at Post Offices?

Hopefully, yes. But only if more people start to use the cards. There has been resistance from some people who are worried about the security risks. They are concerned that crooks can get hold of readers to steal cash by just waving the readers near the cards.

Are they a security risk?

Card issuers say no. They say cards must be no more than 5cm from a reader. If a crook steals a card, you'll be protected by the standard fraud guarantee. Also, the amount he or she can nick will be limited as they'll be asked for a PIN if they try and use it more than three times in quick succession.