Technology evolves at a rapid rate. While the internet was only a few short decades ago a new and novel invention, it is now inexorably linked to our lives, work, leisure, and finances. More Australians are using contactless payments now than ever before. This article will break down everything you need to know about contactless payments, including what they are, how they work, examples of different types of contactless payments, and more. Continue reading to learn more.
What is a Contactless Payment?
A contactless card or payment is when you use your smartphone device to make a payment at a merchant or store. When you tap your contactless card or bring it near the merchant’s point-of-sale terminal, it generates a unique cryptographic code to initiate the transaction between yourself and the business.
After tapping, the card reader then transmits the payment data to a card processing network such as Mastercard, VISA or American Express. The network then checks the data for any possible fraud. If everything is verified, it forwards the request to the card issuer.
The card issuer can then flag a stolen card, a purchase from an unusual or out-of-the-ordinary
location, or a large transaction. It also checks the available balance before authenticating the transaction and sometimes won’t allow it if you are over the limit.
Once all these validations are complete, the card issuer approves the transaction and sends the approval message to the merchant’s point-of-sale machine. This whole process takes just a few seconds to complete, which is amazing considering the scale of the process and the technology used to authenticate a purchase.
Different Types of Contactless Payments
There are various ways to make a contactless payment to buy goods at shops. Here are some of the methods you can use.
Contactless Debit and Credit Cards
All debit and credit cards issued today have contactless technology. Most cards are dual-interface cards, as they contain both an EMV Chip and a provision for contactless payment that lets you tap and go. However, a physical card offers the flexibility of allowing you to use a PIN-authenticated transaction when the contactless point-of-sale terminal is unavailable, which can happen due to outages or terminal problems or if the purchase is above a certain mandated amount.
Contactless Mobile Payments
Your smartphone can double as a contactless payment device with services such as Google Pay, Samsung Pay, and Apple Pay. These apps use near-field communication (NFC) technology that directly communicates with an NFC-enabled device, such as a merchant terminal, to make payments. You can add your physical card to these applications or even link buy now pay later technology to them.
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Smart Rings, Watches, Wristbands and Fitness Trackers
A variety of wearable smart devices, such as smart watches, rings, wristbands, and even fitness trackers, allow contactless payments. With creative RFID technology in effect, these convenient devices can be used as contactless payment methods. These might include Apple Watches, Samsung Watches, Fitbit, and Google Pixel Watch.
Protect Yourself Against Contactless Payment Problems
There are a range of issues and threats when it comes to contactless payments. Card skimming is a technology employed by criminals to skim your card data using black market devices, which are then used to fund scammers' purchases. More and more stores are supplying RFID-protected and secrid wallets in Australia to help keep your cards protected. This technology protects against card skimming and other nefarious technology designed to steal your card details.
Also, apps like Google Pay now require bio authentication to make a contactless payment to ensure that it is you who is making the payment. This means that your phone must be unlocked using your fingerprint, face, or other bio method to authorise a payment from your chosen wallet app.
However, on the whole, contactless payments are relatively safe and are indeed much safer than carrying around a large amount of cash, which can be easily lost or stolen.
A Contactless Payment Summary
This helpful article has covered contactless cards and everything you need to know about making contactless payments. We’ve covered how contactless payments work, the different types of contactless payments and how to protect yourself against potential threats and security risks with contactless payments.
