The manner in which people spend and access their money has changed drastically over the decades, and individuals have learned to use everything from minted coins and precious metals to fiat currencies. The next revolution was the credit card, which allowed for faster and more convenient payments, but now, you are the witness of a total shift in transactions: contactless credit cards. If, until now, you were forced to insert a chip or swipe a card, today’s technological advancements put you in front of a rapid transaction process where not even a card is necessary in your wallet.
But as payment technology evolves, a myriad of questions arises: Is contactless payment secure? How does it work? Well, we’ll answer all your questions in the following.
Image source: Provided by myPOS
What is contactless payment?
As their name also suggests, contactless payments involve a no-touch form of charge with the help of a credit or credit card and a POS (point of sale) system equipped with the proper technology. The transaction process is possible due to the RFID (radio frequency identification) used by these contactless-equipped cards. Contactless payments can also use near-field communication (NFC), which means the transaction can only be performed at a distance of about two to four inches. Therefore, retailers ensure that there’s people’s will to complete the payment. When used by the average customer, no-touch payment proves to be incredibly simple: as long as sellers provide clients with a contactless-enabled card reader, they can pay for different goods or services with their contactless-enabled card or mobile phone within seconds.
This method is now the option of a number of people from all around the world, as it’s a viable alternative to introducing or swiping a card into a card terminal. It’s even possible to pay with your watch’s mobile wallet, so if you happen to forget your phone and have to complete a transaction, you don’t have to cancel it. With POS solutions these days, you don’t even have to worry about the possibility of being charged twice. We all know it’s a frequent mistake to touch the terminal twice, but a one-time unique identifier or token allows for a single transaction. Plus, you’ll know when your money will be deducted from your account, as a light sound usually confirms the transaction went through, so there’s no room for mistakes regarding contactless payments.
Before digging into the contactless card topic, we would like to emphasize the fact that these payments are typically for in-person or in-store purchases. We wanted to make it clear even from the beginning not to mistake this payment method with others involving online transactions.
Contactless credit cards
When it comes to contactless payments, everything revolves around contactless cards since these are the most used kind of contactless payment. You can also encounter them under Tap to Go or Tap to Pay, as conducting a transaction usually requires tapping the card over a terminal. The process is, in essence, as simple as it sounds, but the technology behind it is super complex. Tap to Pay cards allow wireless communication with the reader due to short-range electromagnetic waves comprising your credit card data. This way, the information is captured by the POS system and processed to finish the transaction. The technology has reached such an advanced level that you can easily take card payments on your phone up to ten times faster than other payment methods. These cards are often accompanied by a magnetic chip or strip, which allows you to insert rather than swipe. Careful though, this chip is not the same as a no-touch card since it’s designed for more traditional forms of payments or situations where the contactless card reader in a particular store is not functional.
You should recognize a contactless credit card by the four curved lines (wave-like) symbol, which indicates it can be used to complete no-touch purchases. To be sure, you can contact your card issuer, who will help with all the needed information and provide a contactless card in case you don’t have one. The most popular networks (Mastercard, American Express, and Visa) issue Tap to Pay cards, so applying for a contactless credit card shouldn’t be difficult.
How secure is contactless payment?
Contactless payment has become almost standard, particularly since the Covid-19 outbreak. In times of pandemic, more and more individuals turned to this form of payment, which is considered more accessible and secure. Some of the most important contactless card issuers are Visa, Mastercard, American Express, Discover, and Wells Fargo. So, as you can see, this form of payment has successfully been adopted in both Europe and the U.S., which is encouraging. Touchless options are indeed much more convenient than traditional ones, but are they more secure? The answer is yes. Since it uses state-of-the-art technology and cryptographic security, contactless payment is considered one of the safest forms of payment. It also gives thousands of people worldwide peace of mind regarding their financial information. These critical data are indeed communicated from the card to the reader, but they’re encrypted so that no one can ever access them. In other words, it’s a remarkably secure system that offers solutions for anyone. No matter how different the people’s needs may be (and it’s normal to be so), contactless payment provides them with the certainty that their transactions are safe. The one-time code also ensures no transaction is compromised. This unique combination of numbers accompanies every transaction, so you first need to revise that code before completing a purchase. For someone who obtained your payment data, it would be challenging to impossible to complete a transaction since this means they have to crack the complicated algorithm behind this code.
Contactless payments have revolutionized the world of payments with their advanced technology. It seems that more and more people prefer this payment method to the traditional ones, and if we look at the various benefits of touchless options, we can only approve their choices.
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