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In a nushell
Social distancing and a desire to refrain from physical contact during the pandemic accelerated the deployment of contactless payment technology. A contactless credit card is exactly what it sounds like: A credit card that utilizes contactless technology to execute transactions.
- Given the multitude of ways to make payments these days, including through phone applications that don’t require you to dig through your wallet, contactless credit cards may not seem too far out of place.
- Most newly issued credit cards in the U.S. will be enabled with contactless technology.
If you’ve ever “tapped” your credit card on a card reader at a grocery store or restaurant, you’ve more or less experienced how contactless credit cards work in the real world. The technology behind contactless credit cards is similar to mobile wallets, which is how a payment app might execute a transaction.
The nuts and bolts of it really boils down to the use of radio-frequency identification technology (RFID), which allows the card to communicate with the card reader without any physical interaction. Retail stores use the same type of technology to detect whether an item has been paid for when a customer leaves a store between RFID sensors.
That’s really it: The card will “talk” to the card reader from a distance, exchange the necessary information and data, and execute the transaction.
What is contactless payment?
As noted, contactless payment is merely a payment method that doesn’t require any sort of physical interaction. To that end, making a purchase on the internet or through a smartphone app is a form of contactless payment: The purchaser isn’t physically removing cash from their wallet and handing it to a cashier, nor are they swiping a credit card.
Using a contactless credit card involves, first and foremost, determining whether or not you have a card that is capable of making a contactless payment. An easy way to check is to look for the “wifi” symbol on the back of your card: it looks like a series of curved lines, increasing in size from left to right.
Assuming your card is enabled for contactless transactions, using it is fairly simple. If you're at a retail location and ringing up your purchase, look to make sure that the card reader at the store can accept contactless payments. The reader should have the same symbols as your card.
From there, once the reader prompts you to insert, swipe, or tap your card, simply hold the card a few inches from the reader itself. You should get an indication from the reader that the transaction was executed, just like if you had inserted or swiped it.
Contactless credit cards: Pros and cons
Contactless credit cards, in many ways, are the cutting edge of payment technology. At least, where physical transactions still take place in stores. But they have their pros and cons.
The pros of contactless credit cards are fairly obvious: You don’t need to physically engage with a card reader in stores. That may mean that your transactions are faster, and that you can avoid touching grimy surfaces in stores. Plus, there’s less physical wear and tear on your card.
If there are downsides to contactless credit cards, it may be that they’re not necessarily accepted everywhere yet, and that some stores may have technical limitations (card readers that don’t work very well, for instance). There can also be transaction limits in some areas, and for some cards users should check with their card’s issuing bank for details.
Frequently asked questions (FAQs)
Are contactless credit cards safe?
Generally, yes, contactless credit cards are safe to use. While there’s always a potential for security issues to arise with a credit card — contactless, or not — a consumer doing their due diligence to keep safe likely won’t experience many security issues.
What is an example of a contactless payment?
An example of a contactless payment would be using the tap feature on your card to pay for a purchase. The entire transaction requires no physical interaction of any kind.
How do I know if I have a contactless credit card?
You can check to see if you have a contactless credit card by looking for a symbol on the back of the card. The symbol resembles the “wifi” symbol: It’s a series of curved lines, which get bigger from left to right.
Do you get charged for using contactless payment?
You shouldn’t be charged for using a contactless payment, specifically. Though some merchants may add a charge for using a credit or debit card when making a purchase, that charge may still apply in some circ*mstances.
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