Since technology started playing a larger role in businesses across sectors, paying for purchases without cash is easier than ever. To do this, it is not even necessary to pull out a credit card. The Near-Field-Communication (NFC) system allows you to make payments and other transactions without touching the terminal. Simply by holding a card, smartphone, watch or other devices at a certain distance from it you can make payments. This unique technology is rapidly gaining popularity all over the world, making the purchasing of goods and services extremely convenient.
In this article, Team LuxeForGood discuss the functionality of contactless technology, as well as some safety aspects of the same.
SO, WHAT IS MEANT BY CONTACTLESS PAYMENT?
The main aspect of the contactless system is that it does not require direct use of a credit card to write off money. The transaction was accompanied by inserting a card into the terminal or transferring through it a magnetic stripe. But now it is enough to keep it at a close distance from the banking equipment.
The device reads the information and then transmits it to the acquiring center, which will authorize or cancel the operation. It is important that the use of a card for a contactless payment system is possible from outside technical means: a smartphone, a watch, a bracelet to which the payment instrument is attached. In this case, the card itself can remain at home.
Credit cards that can settle without direct contact can be distinguished by special signs — PayWave or PayPass — as well as an additional emblem-picture. Such terminals are already used by large retail stores, food industry and entertainment companies.
WHY ARE CONTACTLESS PAYMENTS GAINING POPULARITY SO RAPIDLY?
There is a number of advantages which contactless payment system provides its users with:
- Fast — contactless payment takes just a few seconds. According to research, contactless payments are 7 seconds faster than conventional card payments and 15 seconds faster than cash payments.
- Convenient — no more looking for change or signing a check.
- Safe — when paying contactless, you no longer need to hand over your card to the cashier. You have complete control over the payment process. At the same time, money cannot be debited twice — after the payment is made, the terminal beeps and turns off.
IS IT SAFE TO PAY WITH YOUR ELECTRONIC DEVICES?
Despite the fact that contactless payments are already widespread, some still doubt their security. Contactless payments are more secure than traditional payments since they are protected by additional security systems. At the time of payment, all data is transmitted in an encrypted form, thereby completely eliminating the risk of data theft. Also, most developers offering mobile contactless payments require a screen lock. Therefore, only you have the “key” to your money.
CONTACTLESS PAYMENT METHODS
Earlier it was already indicated that PayWave or PayPass methods can be used to make payments without real contact. The former is actively used by the Visa system, while the latter is used by MasterCard. There are also options designed specifically for American Express, UnionPay and other operators. But all of them are based on the same principle of work, so they cannot be called very different or unique.
In this situation, the method for making payments is always the same: to make a purchase, you need to bring your payment instrument to a terminal that can pick up the radio frequency on which the chip transmits information. Moreover, the same option can be used if, instead of a credit card itself, you bring another technical device (smartphone, watch, fitness tracker) to a terminal. The difference, depending solely on the bank and country, can be traced only in the amount that can be transferred without entering a pin code.
According to statistics, contactless payments are especially popular when it comes to making payments in the service sector, for example in restaurants, grocery shops or retail stores. It is as well-preferred by public transport passengers. However, there is another side of the issue: the representatives of the organizations themselves are very reluctant to change the already installed banking equipment for new and more expensive ones. So, we can say that the frequency of using contactless payments at the moment depends only on entrepreneurs. Consumers are ready to use them.
In conclusion, we would like to mention that the prevalence of the NFC system in trade and services is growing every day. The progression is increasing every month, and technology has migrated from large cities to small settlements.