The methods of credit card payments have dramatically evolved in the past few years. From manual cards to magnetic strips to computer chips – the methods of credit card payment have become different than what they used to be initially, and the transformation hasn’t stopped.
The tap-and-go method became necessary due to the pandemic, as many opted for a contactless payment method. Now, most businesses encourage customers to make purchases using a contactless card for everyone’s ease and safety.
These credit cards have become a norm in many countries and have reduced the chances of credit card fraud compared to credit cards with magnetic strips.
While this technology has not yet caught up with all businesses, more and more companies are adopting it, meaning it is integral to understanding what a contactless credit card is and how it works.
What Are Contactless Credit Cards?
These credit cards use near-field communication technology that enables cards to share information with a credit card machine or checkout terminal to make payments without any physical contact.
You can tap the card or hover over the card terminal to conduct the transactions. The information is transferred through electromagnetic waves captured by the system to complete the transaction.
The contactless cards look similar to other credit cards but don’t work the same. Most credit cards contain in-built chips, but these need to be inserted into the card machine instead of hovering or tapping it, indicating that chip-based cards are not the same as contactless credit cards.
This contactless payment method is often referred to as ‘tap to pay or ‘tap and go’ and is ten times quicker than other payment methods. Moreover, the credit card linked to your smartwatches, smartphones, or other devices offers an alternative contactless payment method.
The growth in contactless payments is rapidly increasing, and it is expected to be one of the main payment modes in almost all businesses within the next two to three years. Credit card issuers have also introduced dual-interface credit cards have also been introduced that be used for both contactless payments and chip readers.
How Do Contactless Credit Cards Work?
Contactless credit cards are equipped with an embedded chip that emits electromagnetic waves. This chip isn’t the same chip that can be inserted into a credit card reader. All you need to do is hover your contactless credit card a few inches above the payment terminal to process and complete the transaction.
It barely takes a few seconds to complete the transaction. The payment terminal would beep, flash a light, or display an approval message on the screen to indicate the transaction has been successful.
Is Your Credit Card Contactless?
If you are wondering whether your credit card is contactless, look for the emvco contactless symbol on your card. It is a wave-like symbol that resembles the Wi-Fi symbol. All the credit cards with this symbol can be used to make contactless payments at any retailer, shop, restaurant, or other business accepting contactless payments.
Ways to Use your Contactless Credit Card
The business should have a contactless-enabled terminal to use your contactless credit card. You can ask the cashier or look for a symbol like the Wi-Fi icon to determine whether the business accepts contactless payments.
Moreover, you can also use online contactless Mastercard or Visa locators to identify all the businesses near you that accept contactless payments. When you have a contactless credit card and a contactless payment system at the business, you can hover your card for a few seconds over the terminal to make the transaction.
You can also tap the credit card through your wallet to make it work. However, this method would not work if you have multiple contactless credit cards in your wallet, as the machine might capture the information of the credit card you didn’t intend to use.
Suppose your contactless credit cards are linked to any digital wallet services, like Google Pay or Apple Pay. In that case, you can hover the device over the card terminal for the transaction without even removing your card from the wallet. However, ensure that you have set up your primary card in Google Pay or Apple Pay in case of multiple contactless cards.
Can You Use Contactless Credit Card Payment Everywhere?
Most stores, restaurants, and coffee shops have introduced contactless payment for quick purchases under $30. In fact, around 80% of contactless payments are under $25, according to Mastercard.
Since the pandemic, there has been rapid growth in contactless payments, and more retailers are now switching to EMV card readers to allow contactless payments to their customers. According to Visa, 78 of 100 visa merchants in the U.S. are offering contactless checkouts.
Contactless payments are now also being accepted in various transit systems. Many transit authorities have replaced credit cards with their own transit contactless cards to initiate an easier transit payment system.
Benefits of Contactless Credit Cards
Here are some of the many advantages of using contactless credit cards:
Speed is crucial in today’s fast-paced environment. Many people have experienced the frustration of the machine taking longer to process the transaction after inserting the credit card. On the other hand, simply hovering your card over the terminal for a few seconds to complete the transaction saves a lot of time and is much faster than other means of payment. It also helps you avoid tedious lines due to the swift transaction.
Limited Public Surfaces Contact
After the pandemic, most people have become more careful about the public surfaces they touch. Contactless technology allows you to avoid touching any machine and make the transaction quickly and safely.
EMV chips and magnetic strips tend to wear out with time and repeated usage, resulting in waiting for a new card to be processed by the credit card issuer. This is not a problem in the case of contactless credit cards. It can easily last you for years.
Improved Overseas Travel
One of the major benefits of contactless credit cards is that they make it easier to travel abroad. Many countries, like Australia and Europe, have made pin and chip cards a default payment method. Moreover, most self-service machines usually require a pin and chip-enabled card or contactless credit card payments. If you don’t have a pin or chip card, a contactless credit card would be the only way to make the transactions.
Safety of Contactless Credit Cards
Contactless credit cards are safer than other card payments but can be considered safer due to how the card interacts with the credit card terminal. The card security utilizes tokenization to transform the card number into random alphanumeric characters and generates a cryptographic code linking the card to the current transaction. These measures ensure the safety of your card from any breaches.
A few people have wondered whether the contactless credit card could accidentally make payments for someone near them at the checkout counter. However, this is not the case since these cards can transfer the card data to the card readers from a few inches away. This makes it impossible for such an accidental payment to occur.
There have also been concerns about RFID protection, with some people wondering if they should invest in a wallet that can block the RFID frequencies to avoid credit card fraud. Fortunately, these credit cards are inbuilt with various security layers.
Many people have already started using contactless credit cards and have realized their benefits and security of them. The increased security, ease of fuse, and faster transactions have made these cards a popular payment option for businesses and consumers. These are one of the safest payment methods that will soon become one of the default payment methods in the country.