Contactless payment methods are credit cards and debit cards, key fobs, smart cards, or other media, including smartphones and other mobile devices, that use radio-frequency identification (RFID) or near field communication (NFC, e.g. Samsung Pay, Apple Pay, Google Pay, Fitbit Pay, or any bank mobile application that support Contactless) for making reliable payments. The implanted chip and antenna allow consumers to wave their card, fob, or handheld device over a reader at the point of sale terminal. Contactless payments are made in close physical vicinity, unlike mobile payments which use broad-area cellular or WiFi networks and do not involve close physical vicinity.
Some suppliers claim that transactions can be twice as fast as traditional cash, credit, or debit card purchase. Because no signature or PIN verification is required, contactless purchases are limited to small price sales. The absence of authentication provides a window during which fraudulent purchases can be made while the card owner is ignorant of the card’s loss.
Definition of Contactless Payment
Contactless payment is a protected system for consumers to purchase products or services via debit, credit or smart cards (also known as chip cards), by using RFID technology or near-field communication (NFC). To perform a contactless payment, a person simply needs to tap their card near a point-of-sale terminal – leading to the nickname “tap-and-go”. Since contactless payments do not require a signature or a PIN, transactions sizes on cards are limited. The allowable amount for a contactless transaction varies by country and by the bank.
How does contactless payment operate?
Contactless credit cards have a chip inside them that transmits radio waves. An antenna is built into the plastic to secure the connection with a contactless reader. This is known as radio frequency identification (RFID) technology.
To pay for something with a contactless credit card, you hold the card near a payment terminal (known as an RFID reader) and it picks up the signal, corresponds with the card and processes the transaction.
The payment terminal will respond if the payment was successful or not. Mobile phones and other electronic gadgets use near-field communication (NFC) to transmit data – which is based on the technology used in RFID.
How do I execute contactless payments?
You can make contactless payments with a number of tools. The most common are debit or credit cards and mobile phones, nevertheless, you can also use:
This technology is also used for opening doors or even as a security pass. You can identify contactless devices by the logo, which is made up of four bold lines creating a wave logo.
BREAKING DOWN Contactless Payment
Contactless payment has become a favorite payment method for smaller transactions. Most banks give contactless payment cards and the new payment terminals are equipped for a tap. Although there are smaller shops that do not offer tap abilities, many national chains have moved to tap capable payment terminals. The main benefit of contactless payment is that it speeds up transactions by taking out the step where a customer must enter his or her PIN. Tap customers speed up the line so that both the merchant and the customer see time savings when contactless payment is done.
Security Steps for Contactless Payment Transactions
With the benefit of contactless payment, many consumers are concerned about the security of the cards. Many stories are prevailing in the media about offenders skimming card data using smartphones to read the tap cards in consumers’ wallets. For this cause, cardholders have zero responsibility if their tap card is used without their permission. Moreover, the scale at which a card can be read is very short and, even if the criminal is close enough to grab data and do a transaction, he cannot create a copy of the card. The chip and pin card are still the most secure, as they can’t be duplicated and they require data (your pin) that is not included anywhere on the card.
If the skimmer gets your card data, his subsequent step is to obtain a website that doesn’t require the three-digit code printed on the back of the card and run transactions under the credit limit. If a criminal steals your physical card, he’ll move to a nearby store to buy gift cards using tap. Though disturbing, you can contradict the transactions and get a new card issued.
What are the pros and cons of contactless payment?
Contactless payments are a convenient option to cash and Chip and PIN for varied reasons.
Foremost, using any mode of contactless payments suggests you won’t have to waste time entering your PIN while using your phone lets you pay for things without rooting around your purse or wallet.
Contactless payments also have a number of additional security features in place, such as limiting the number of transactions you can make before having to enter your PIN. Some contactless service providers force a limit on the size of purchases you can make – most commonly set at £30 for contactless debit and credit cards. If you exceed this amount, you have to pay using Chip and PIN.
This doesn’t apply to mobile contactless payments as you have to pass an added layer of identification to unlock and use the phone, such as a fingerprint or iris scan or a passcode.
Regrettably, contactless cards carry risks – if your card is stolen or lost, someone might be able to use it to make contactless purchases. This makes it very important to report the lost card with your provider.
Additionally, a regular check on bank and card statements for fraudulent activity when using the contactless card or initiating contactless purchases can minimize fraud.
To know more about contactless payments, contact us now. You can call us at +44 800 776 5988 or even mail us at [email protected].