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The Association of Banks in Malaysia responds to “paywave” viral video

There are many Malaysians that still believe that contactless payments are not safe. Recently, there was a video being circulated which supposedly demonstrates how easy it is for criminals to steal money from your paywave or paypass card. We have debunked such claims yesterday and the Association of Banks in Malaysia has also issued a press statement on the viral story.

Both the ABM (Association of Banks in Malaysia) and NCG (National Cards Group) have assured that the video didn’t originate from Malaysia. They also added that such fraudulent activity is unlikely to happen due to the stringent merchant onboarding process undertaken by the banks and the financial institution.

The organisation had emphasised that only registered businesses or approved merchants that have undergone a due diligence process are eligible to apply for a POS terminal facility. They added that all card transactions must be processed by a bank or a financial institution and all of these transactions are traceable.

In a nutshell, this means that no random individual can accept card payments directly. If a card transaction is approved, your money doesn’t get transferred to someone’s personal bank account. This is only possible with approved merchants with a card terminal. The reality is that merchants will not want to use your card without your knowledge as any unauthorised transactions can be traced back to them. If a customer files a dispute, the merchant will be investigated and they will be terminated if there are repeated incidents of fraud.

The association also wants cardholders to know that they are also protected from losses arising from fraudulent activities. Of course, this is provided that cardholders keep their card safe and report any unauthorised usage as soon as reasonably possible.

To recap, a PIN will be required for paywave transactions exceeding a certain limit, which is usually RM250 by default for paywave. They added that cardholders have the right to lower their permitted transaction limit or you could turn it off completely by contacting their respective card providers.

In case you missed it, we’ve given our solid reasons why this paywave/paypass butt tapping technique will not work. Not only it is extremely difficult to perform without getting caught, the registered merchant of the card terminal can be tracked very easily. Mind you that merchants will need to wait for a couple of days before they can receive the money, so it isn’t worth the hassle.

The main reason why such videos became viral is that the general public does not fully understand how the technology works. It looks convincing at first but there are so many safety measures in place to prevent fraud.

As always, don’t share if you’re not sure. It’s recommended to perform a simple fact check before you hit the share button.


Alexander Wong