There have been a lot of new payment terms being used in the last 5-10 years, and you may not be 100% sure of what they mean. Examples of these ‘new’ terms include digital wallet, Apple pay, Google pay, Samsung pay, contactless payment, mobile payments, Fitbit pay and many more. This blog will help you understand these modern payment terms.
Here we are going to run through exactly what a contactless payment is, how it is done, the limits involved, and the main benefits of utilizing contactless payments.
We are also going to answer all the frequently asked questions that people have regarding contactless payment technology.
If you have seen a customer complete a transaction without inserting their payment card into a card reader, but holding their payment card or mobile phone near the top of the pos terminal until the green light flashes, then you have seen a contactless transaction. Nowadays, most credit and debit cards offer contactless payment technology.
What exactly is contactless payment?
Contactless payment is the process of a payment transaction that takes place via a contactless chip that is embedded in payment cards, mobile phones, key fobs, and tags. The contactless chip communicates with the reader device and uses RFID technology (radio frequency identification) or NFC standards, which stands for Near Field Communication.
NFC technology might sound like another one of these ‘new’ and confusing terms, but it does exactly what it says in the name. It simply allows the transaction to take place in close proximity, without the need for physical contact. The contactless card or smartphone must be in proximity of (usually) 10 centimetres or less to the card machine, in order for NFC to read the radio waves, according to Digital Trends.
Contactless transactions are more secure than standard magnetic-stripe card transactions. Magnetic stripe cards are outdated in this day and age, as they display bank account information on the stripe, making it much easier for fraudsters to steal your details and commit fraudulent activity.
As the term ‘contactless’ explains, there is no need for any physical contact between the customer’s payment device and epos terminal when doing a contactless payment.
What is the benefit of contactless payment?
There are many benefits of contactless payments and using contactless cards. They are safer and quicker than standard transactions, making them more convenient for customers. Combined with a robust EPoS or POS system, it can be a recipe for success in streamlining financial transactions for any business.
Let’s dive into the main benefits of using contactless payments.
Contactless Payment is Safer
In many regards, a contactless payment card is safer than a standard debit card or credit card. Contactless payment systems give customers peace of mind as they are protected against fraudulent payments.
Retailers and hospitality providers don’t have access to your contactless credit card information. Contactless payment cards reduce the threat of hackers through NFC technology, which uses data encryption when transferring sensitive information.
Contactless payment is safer than a mag stripe payment. Customers also don’t have to worry about incorrectly typing their PIN when using contactless payment methods, such as Apple Pay, Google Pay, or contactless credit cards. The connection on a contactless reader is also quicker than on standard payment terminals.
Contactless Payment is Convenient
When completing a contactless transaction, all you need is your contactless card or smartphone. You don’t need to carry physical cash. It is a much quicker process than inserting or swiping your credit card or debit card. You don’t need to enter a PIN or sign a receipt, saving you time without costing extra money.
Nowadays, almost all retail shops, restaurants, bars and other shops and services with a great EPoS system accept contactless payments. This means contactless payments work almost everywhere, making them very convenient to use.
Contactless Payment is Faster
Using contactless technology is much quicker than inserting or swiping credit or debit cards. This is because there is no need to type in a PIN number or sign a receipt. These quicker payment times result in shorter queues at the checkout.
What if my contactless card doesn’t work?
If your contactless card doesn’t work for contactless payment, it is likely that you have exceeded your tap limit. You can insert your credit or debit card and complete the transaction using your PIN. However, if your contactless card doesn’t seem to work at all, you should contact your card provider and request a new one.
What is the maximum amount you can spend in one go with a contactless payment?
In pre-Covid times, the maximum amount a buyer could spend on a contactless payment was €30. However, this maximum contactless payment limit was raised to €50 during the Covid-19 pandemic, in an attempt to encourage contactless payments and reduce physical contact during transactions. It is important to note that many mobile phone payments do not have an upper transaction limit when authenticated through biometric technologies.
What happens if I am charged multiple times for the same transaction?
It is highly unlikely that you will be charged more than once for the same transaction. Payment terminals are equipped with features to combat this. In a scenario where the payment terminal detects more than card, it will ask the customer to present only one card, to avoid double charging. The payment terminal may even cancel the transaction to avoid overcharging your bank account.
Can I use my contactless card abroad?
Yes, you can use your contactless card abroad. If you are travelling to one of the 18 European countries that use the euro, there is no additional charges or fees for using your card abroad.