What is Contactless payment?

Contactless payment technology is an anti-fraud measure invented by Visa, MasterCard and Amex with the aim of avoiding the use of the magnetic strip on the back of the credit card and speeding up the card payment process.

When contactless payment did not exist yet, PIN Pads charged customers using the magnetic stripe. The problem of using this system was that it was very easy to clone and sold card holder information on the black market increasing the possibility of fraud. Therefore the usage of contactless payment technology and EMV chip is so far the best measure used by credit card companies to fight fraudulent transactions. 

How does Contactless payment work?

Contactless payment would not be possible without NFC (Near Field Communications) technology. The NFC is a chip that has the function of wirelessly transmitting information a few millimeters from the terminal. That is, the PIN Pad has the NFC chip tucked inside of it and when we swipe our credit card with EMV chip a few millimeters from the terminal it reads the encrypted information.

The operation of a contactless payment technology:

• The retailer introduces the amount that he wants to charge his client in PIN Pad machine. 
• The customer swipes the card a few millimeters from the POS, exactly in the part where the EMV chip is inserted. 
• For amounts higher than 20 euros the client is asked to introduce his PIN number. 
• The contactless payment technology establishes communication between the issuing bank and the terminal in order to verify the client and confirm the purchase.

As you can see the payment process is fast, safe and avoids a lot of paperwork but, how can a client know if his card can be used for contactless payments? Further, we are showing you a prototype of a credit card adjusted for contactless payment. Please compare it to the one you have. 

Is contactless payment secure?

Contactless payment technology is very secure method of payment but as we know the illegal operations are always ahead. It has been detected that NFC payment terminals can read the card information on greater distance creating a possibility of someone approaching you with the contactless terminal and charging you for the amount of less than 20 euros without your authorization. To avoid these practices of fraud it is recommended that the client instruct the issuing bank of the card to activate security PIN option for all transactions, even those of small amounts. 

In case you have been charged without your authorization and fell as a victim of contactless payment fraud, please contact your issuing bank and claim your money back.