A growing number of Jamaican merchants are resisting the use of the contactless functionality on point-of-sale (POS) terminals, citing fears over disputed transactions and fraud, despite assurances from commercial banks that the payment method is secure and protected.

This occurs despite commercial banks insisting the tap-and-go payments are secure and protected under international standards, leaving consumers increasingly frustrated when told they cannot pay with a quick tap of their card or phone — even when terminals display near field communication (NFC) capability.

The Jamaica Observer documented cases like a Liguanea, St Andrew, store requiring card insertion under management orders. A manager cited past disputes involving contactless transactions as the reason, though the shop later compromised by requesting customer identification for taps. Multiple merchants told the newspaper that chargeback risks drove their stance.

Chargebacks occur when a cardholder’s bank seeks reimbursement from a merchant’s bank for issues such as fraud, unauthorised payments, incorrect charges, or undelivered or faulty goods. Financial institutions, however, dispute the prevalence of contactless-related disputes. Danielle Cameron Duncan, vice-president of payments and digital channels at National Commercial Bank Jamaica Limited (NCB), stated via email:

“To date, we have not received formal complaints or reports from NCB merchants about chargebacks related to contactless transactions. That said, we understand that the fear of fraud is real — especially when transactions are fast and don’t always require a PIN or signature. It is vital to note that contactless transactions on POS account for approximately half of the transactions done on our platform and have grown by 21 per cent year-over-year.” NCB said its platform processes about 32 million transactions annually.

Addressing merchant concerns directly, Cameron Duncan highlighted regulatory protections. “It’s important to note that contactless payments, whether through chip-enabled cards or digital wallets, are governed by international liability shift standards set by the Payments Association. Under these rules, when a merchant accepts a contactless payment on a certified NCB POS terminal, they are protected from financial loss in the event of fraud, once done within the approved guidelines and the merchant is not found complicit.”

Echoing the emphasis on security, Sagicor Bank Jamaica Limited (SBJ) indicated: “Sagicor Bank has not had experiences relating to chargeback requests over contactless payments that adversely impact merchants.”

Scotiabank Jamaica (BNSJ) provided further clarity on liability thresholds, stating: “…merchants bear no liability for contactless transactions conducted in person below the contactless limit of US$50 equivalent. Transactions above that limit usually require a pin or signature to complete the transaction.”

BNSJ added that it is proactively addressing hesitancy, noting:

“We have been in communication with Scotiabank merchants who had stopped accepting wallets and most have restarted. We are currently in the process of educating our merchants on contactless transactions and acceptance procedures to minimise fraud.”

These limits underscore industry parameters: Most banks enforce a base contactless threshold of US$50/J$5,000. NCB permits higher values — US$100/J$15,000 for physical cards and US$150/J$22,500 for digital wallets. Nearly all commercial banks except two issue EMV-enabled debit cards.

Digital Wallet Hesitation Persists

Specific resistance targets digital wallets like Apple Pay, with some merchants displaying rejection notices. Fontana Limited halted digital wallet acceptance earlier this year citing fraud concerns but resumed after NCB’s intervention.

Cameron Duncan detailed NCB’s response: “We take the concerns of our merchants very seriously, when Fontana expressed concern, we took immediate steps to engage them directly. We conducted in-depth retraining sessions with their teams to walk through how contactless transactions and digital wallets like NCB Pay work, including the built-in encryption, tokenisation, and real-time fraud monitoring that make them highly secure. These sessions helped clear up misconceptions and this approach was extended to other merchants island wide.”

Some pharmacies and cafés continue rejecting digital wallets over perceived security flaws. Sagicor Bank countered: “Our point-of-sale terminals are capable of processing transactions via digital wallets. Digital wallets are a safe and secure payment option that merchants can accept. We have created and maintained open lines of communication with our merchants, which allow them to obtain clarification on various matters including the processing of payments, to ensure they receive adequate guidance. These channels include our relationship managers across the branch network, as well as the Group Client Contact Centre. Sagicor Bank has not received any reports of disputes/fraud associated with the use of a digital wallet.”

NCB Pay remains Jamaica’s only operational digital wallet. Global options like Google Wallet, Samsung Wallet, and Apple Pay lack integration with Jamaican banks. BNSJ offers GarminPay for compatible smartwatches and confirmed plans to introduce Apple Pay pending the company’s Caribbean rollout timeline. Apple Pay currently operates in the Dominican Republic and the Bahamas.

BNSJ addressed digital wallet security: “There have been no known issues with these transactions. Merchant concerns revolve around security of the transaction and trusting that the wallet holder is authentic. The tokenisation process required to configure one’s wallet provides an additional layer of security including biometric access on the specific device which is expected to minimise fraud via this medium. The continuous education of merchants on card acceptance procedures is a primary objective of our bank and this will be intensified once local wallet become available to credit card holders from local banks.”

A sign rejecting Apple Pay.

A sign rejecting digital wallets.