Prepare to tap your credit card, now that you’ve heard of dipping your credit card (where the chip is inserted into the card reader) and swiping your credit card (where the magnetic stripe is passed through a card reader). That’s accurate. You can now finish a transaction by just tapping your Contactless Credit Card against a point-of-sale machine.
Contactless Credit Card has been widely used abroad for many years, Any change in technology raises a number of queries, such as, How do these cards function? The technology is safe, right? In which banks are contactless cards issued?
Here is our guide to all there is to know about Contactless Credit Card that you never knew you wanted to know.
Table of Contents
Contactless Payment: What Is It?
A point-of-sale system with the required technology can accept credit, debit, or gift cards without requiring a touch. This is known as “contactless payment.” When possible, contactless-equipped cards execute transactions using near-field communication (NFC) and radio frequency identification (RFID).An alternative to inserting or swiping a card into a card reader is contactless payment. For many cardholders and retailers, it’s a quick, simple, and largely secure method of payment.
Contactless Credit Card: What Is It?
Using RFID technology, a Contactless Credit Card enables you to tap or hover the card over a card terminal to complete a transaction. Your credit card information is transmitted by the card in the form of short-range electromagnetic waves, which the point-of-sale system picks up and uses to complete the transaction.
Many credit cards now come with chips inside, but they’re not the same as Contactless Credit Card because they allow you to “insert” rather than “swipe.” Regardless of other technologies, a card with contactless technology resembles other cards in a similar way. Every credit card must at the absolute least have a magnetic strip on the back and printed credit card details.
Contactless payments, often known as “tap and go” or “tap to pay,” are up to 10 times faster than traditional types of payment. Credit cards that are linked to gadgets like smartphones or smartwatches offer an alternate contactless payment method utilizing the same technology. For instance, Apple Pay safely keeps credit card data and personal information on an iPhone or Apple Watch. Instead of pulling their credit cards out of a wallet, purse, or pocket, customers can utilise smart devices to tap and go at participating stores.
The Operation of Contactless Credit Cards
A tiny integrated chip in contactless credit cards emits electromagnetic waves. This is not the chip that you use to “insert” instead of swiping. Your payment information is transmitted when your card is a few inches from a contactless payment terminal.
Although “tap to pay” is a common term, no tapping is actually required. Instead, in order to start a transaction, you typically need to put your card in close proximity to the payment terminal.
Don’t remove your card too quickly; the transaction may take a moment or two to complete. The payment terminal may beep, show a green checkmark, or flash a green light when the transaction is finished.
How to Use Contactless Credit Card
The merchant must have a contactless-enabled terminal in order to use the contactless payment feature. Similar to how they are currently common in Canada, Europe, and Australia, these payment terminals are soon becoming commonplace in the United States. To locate businesses nearby that accept Mastercard contactless cards, use resources like the Mastercard Contactless Locator. Generally speaking, a terminal is equipped to accept contactless cards if it contains a little wifi icon.
When you have a contactless card and the businesses you frequent support contactless payments, you can make a purchase by holding the card over the card terminal or point-of-sale.
Hold the card over the terminal for a few seconds (this doesn’t require physical contact between the card and the terminal to work). When the transaction has been successfully completed, the terminal will notify you with a success message. Finally, you’re done.
You shouldn’t tap your wallet or handbag on a card reader if you have several contactless credit cards. If not, the payment can be posted to a card other than the one you intended. Always remove the specific card that will be used for the transaction.
Hold your mobile over the card reader to make a payment if your contactless credit card is linked to a digital wallet service like Apple Pay or Google Pay rather than taking your wallet out. If you have many contactless credit cards, make sure your principal card is set up in Apple Pay or Google Pay as the default card.
Understanding Contactless Credit Card
On the front or back of your card, search for the contactless indication sign. Turned on its side, the contactless symbol resembles a WiFi signal. A card terminal’s or point-of-screen sale’s will display the same symbol to show that contactless payments are accepted.
Contactless Payment Security
Knowing how this technology operates may make contactless credit cards appear a little too safe to be true.
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One-Time Code
The contactless card chip, like the chips in our credit cards, generates a unique code for each transaction to go along with your payment information. When you “tap” to pay, this code is delivered along with your account number. No transmission of your name, billing address, or card verification code is made.
Even if they were successful in obtaining your payment information fraudulently, it would be challenging, if not impossible, for them to make a contactless payment without your card or any other necessary information. A thief would need to figure out the challenging technique that the bank uses to generate this code in order to generate the one-time code.
Contactless credit cards are more secure to use than magnetic stripe credit cards because of this one-time code. Your money and personal information can be stolen by a skimming device when you swipe a magnetic stripe. The information can then be used by hackers to make a counterfeit magnetic stripe that they can use to make fraudulent purchases.
Physical Security
The major security problem with contactless credit cards will be physical card possession rather than skimming. When using contactless payment, there is often no need for a PIN or signature, so if your card is lost or stolen, someone else could use it without your knowledge.
You shouldn’t leave your contactless cards at home for this reason. Any unauthorised charges should be covered by a credit card company’s fraud protection if your card is stolen. Because of this, some card issuers set a maximum payment amount for contactless transactions. For instance, American Express usually has a $200 transaction cap. Due to COVID-19, several of these restrictions have been increased or removed. Be careful; this protection might not always apply to debit cards. To confirm fraud protections, check with the company that issued your card.
When a card isn’t being used for a purchase, electromagnetic (RFID) shielding, either integrated into the lining of a wallet or case, can assist prevent it from being skimmed.
Advantages of Contactless Credit Cards
Speed
The speed of paying by “dipping” or “inserting” a credit card chip is now something that many of us are familiar with—or not. Since we all drift off or start a new thought or conversation during this time, most payment terminals buzz or ding to let you know when you may finally remove your card. This is because it takes so long between inserting the card and receiving a confirmation.
In contrast, utilising a contactless chip to “tap” to pay can be done quickly. Compared to inserting a credit card, contactless payments are both quicker and safer than using cash or a magnetic stripe swipe.
Reduced Contact with Public Surfaces
The Covid-19 outbreak has drawn much-needed attention to how many and how cleanly the shared surfaces that we all touch are. Credit cards using contactless technology help reduce touch points overall.
Less Wear-and-Tear
By coming into constant contact with payment terminals, magnetic strips and EMV chips can deteriorate. By their very nature, contactless chips won’t have this issue. A contactless card chip should have an extended lifespan.
Better for Overseas Travel
Even while many of us aren’t currently able to travel abroad, another advantage of contactless cards will become clear once international travel is once again feasible. The use of chip and PIN technology is already practically standard practise elsewhere, particularly in Europe and Australia.
Many self-serve ticket machines demand contactless payment or a card that supports Chip and PIN. Some businesses may only accept contactless credit cards as payment if you don’t have a card with Chip and PIN technology.