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What exactly is contactless payment?
It’s the transaction method that makes it easier than ever to pay for things using your mobile device, mobile phone or contactless card. Just take out your card, hold it next to a terminal and the transaction is complete. Isn´t it simple? This is made possible by NFC technology. The NFC chip is responsible for this contactless magic.
Contactless technology has made waves in the payments landscape, a pandemic-driven trend that has now come to dominate as a viable way to pay. Let’s take a look at the contactless payment methods:
- Contactless debit and credit cards – “Tap to Pay” cards, which contains a small antenna that allows the reader to communicate with the device wirelessly
“Tap to Pay cards have undergone rapid growth in only a few years. In Europe, contactless payment has nearly become standard, with the majority of new cards featuring the service. In the U.S., adaptation has been slower, but its prevalence continues to grow.” as reported in the Forbes magazine.
- Mobile Apps and Wallets – A digital version of a physical wallet that stores your payment information, loyalty cards, tickets and other digital assets. Google Pay and Apple Pay are two of the most popular mobile wallets in use today.
- Smartphones with NFC technology module – Almost every modern smartphone is equipped with this chip. To activate it, simply unlock the screen and hold the device near the reader
Source: St.com
- Smartwatches – Another wearable device with built-in NFC technology modules.
Contactless payment technology
Contactless transactions use either Radio Frequency Identification (RFID) or Near Field Communication (NFC) technology. These radio waves share your bank account, contactless card or phone app details with the merchant’s payment reader when you make a purchase.
The contactless transaction security
All contactless cards and other devices have many layers of code and security protocols embedded in both the software and the hardware to protect them from being compromised by crime.
“Additionally, for purchases exceeding chosen amount, PIN-code entry is mandatory. This ensures that if the card is stolen, the perpetrator won’t be able to make larger transactions. This technology is considered even more reliable for a virtual wallet, which is also popular among contactless payment methods. “
Global contactless trends
- Biometrics. In response to the demand for rapid confirmation of payments within omni-channelisation, it is being actively developed.
- It is predicted that in 10 years’ time, digital currencies and cryptocurrencies will be as ubiquitous as card-not-present payments are today.
- Meta-universe – Futuristic scenario. Has a great potential for the mass market. It allows us to look at the buying process in a new way and to engage users from different parts of the world.
Contactless is more than trendy, it’s here to stay.
From consumers looking for seamless shopping experiences to organisations looking to streamline their operations, the benefits of contactless have never been clearer. Embrace the contactless revolution as it reshapes the way we exchange value in the digital age.
