Victoria's deputy police commissioner Lucinda Nolan labelled tap-and-go cards "absolutely crazy" on Wednesday, and urged banks to change the technology.
Police say the cards, which allow customers to make small purchases without a PIN or signature, are largely responsible for a near 30 percent surge in deception and thefts across the state in the past 12 months.
Nolan said the cards were stolen from mailboxes, handbags, and cars before being repeatedly used by thieves for days.
However, banks and credit card companies insist there's no evidence of such a link.
Australian Bankers' Association CEO Steven Munchenberg said fraud on tap-and-go cards is extremely low, and the criticism is surprising.
"The banking industry is happy to discuss police concerns, but any response has to be in proportion to the problem," he said.
Ian McKindley, Visa's risk management head, said tap-and-go cards are popular and just as secure as other cards.
"There has been no increase in the rate of fraud as a result of the introduction of contactless payments technology," he said.
Customers were also protected from having to pay for transactions made on a stolen card, he said.
MasterCard also said that it has found no increase in fraud relating to tap-and-go cards, and was surprised by the police comments.
Police believe financial institutions have to realise how bad practice can contribute to rising crime rates.
A similar pitch was made to petrol stations earlier this year in a failed bid to get them to adopt prepaid only at the pump to reduce the number of petrol drive-offs.
But Nolan said she's hopeful that negotiations with the big banks can be more successful.
"We need to make sure that they understand not only the impact on community safety they're having, but the impact on Victoria Police," she said. The push against tap-and-go cards came as Victoria Police also reported the state's overall crime rate jumped 2.7 percent in the past 12 months, largely due to assaults and drugs.
Drug offences jumped 8.8 percent, which police attribute to increased policing, while the number of assaults jumped 4 percent — but most were related to family violence incidents.
Robbery is down 18.3 percent, while property crimes have also dropped.