Contactless Credit & Debit Cards and How They Work

Contactless Credit & Debit Cards and How They Work

The COVID-19 pandemic amplified card processing technologies’ appeal as consumers redefined spending habits and shifted toward eliminating cash and physical contact. Meanwhile, health precautions arose significantly, and disinfectants were in high demand, prompting users to migrate to contactless payment methods to contain the virus.

While you may perceive it as extra work, you already have the necessary tools to set up contactless payments. For instance, payment requests sent via text message or email need to be processed simply through the payment channel to ensure a secure and seamless payment.

What Are Contactless Payments?

Throughout the last few years, “wave and pay” has gained traction. Tap-and-go contactless payments eliminate the need for cash. Upon completing a transaction, consumers tap their cards at a point-of-sale terminal as long as they are close to it. No cards need to be inserted. 

Therefore, consumers benefit from contactless payments since they can do so without entering their pin, or lugging cash around. However, consumers may have been sceptical about the security of contactless payments when first introduced, but they have now grown to trust the technology behind the payments. 

The benefits extend to businesses too, as they can conduct business more efficiently without added costs. Further, using contactless payments increases customer satisfaction and protects businesses against fraudulent charges. 

What Are Contactless Card Payments?

The convenience of paying by card has certainly overtaken buying with cash. The contact is limited as well as payments are convenient. Traditionally, debit and credit cards have been inserted into customer-facing devices, a pin has been entered, and a receipt has been printed.

Payments made with contactless cards no longer require these steps. Here, the payment is made by just hovering the card over the device; there is no keypad touch and no exchange of cards or receipts involved.

How Do Contactless Credit and Debit Cards Work?

The technology behind contactless cards is radio-frequency identification (RFID). When the card is held near the reader during a transaction, this allows the card to communicate with the reader. 

Cards with contactless technology also frequently contain an EMV chip as well as the usual credit or debit card number, expiration date, security code, and magnetic stripe. These vary the options available to cardholders at the register. In such cases, you can still swipe your card or use the chip reader if the store does not have contactless readers. 

Authentication of your contactless card information occurs when you hold your card against the contactless reader. Thereafter, the merchant’s point-of-sale system sends the transaction to the card issuer. The issuer then analyzes the transaction before it is approved.

All those steps may seem daunting. However, the tap-and-go process usually takes less than a second, as compared to inserting or dipping a chip card-and way faster than paying with cash.

To Conclude

Here are a few tips on how to use a contactless credit or debit card:

  • You can recognize a contactless card reader by its symbol. The four curved lines you see on your card should also be listed on contactless card readers. 
  • You must hold the card within one to two inches of the contactless symbol when prompted.
  • As soon as your purchase has been approved, you’ll receive a confirmation, which may include an audible beep, green light, or checkmark.