As contactless payments explode in necessity and popularity, here is your brief overview and everything what you need to know about contactless payments. A recent survey shows that contactless card payments make up 20% of all card-based payments globally.
Contactless payments utilize near field communication (NFC) technology to enable communication between two electronic devices. Near field communication is a short-range wireless communication system in which data is transmitted over radio waves between two devices that in close range. Contactless-enabled payments are tapped on the compatible card reader to allow for the secure transmission of payment data.
There are two main types of contactless payments consumers use:
Contactless Cards – Contactless cards are credit or debit cards that have an antenna embedded in the card to enable transmission of payment data.
Mobile Wallets – Mobile wallets are apps, in which the customer can store their card information. At checkout, the customer opens the app and taps their mobile device on the card reader.
Contactless payments come with an array of benefits for merchants and customers like:
Faster Checkout Process – Contactless payments are simply tapped on the card reader, and the cardholder does not need to enter a pin.
Enhanced Security – Contactless payments utilize EMV chip card technology, which is much more secure than magnetic stripe transactions and has already proven to lower fraud rates. Also, contactless payments to not transmit the cardholder’s name or security code, which makes it harder for fraudsters to make unauthorized purchases by intercepting contactless card data.
Contactless payments are much more secure than the easily cloned magnectic stripe cards that feature outdated technology. Identity thieves can swiftly read a magnetic stripe’s data and clone it for illegal use. In contrast, a contactless payment is authenticated, drastically reducing the chances that an identity thief can appropriate the cardholder’s data.
Is your business ready to start accepting contactless payments? Reach out to PaidYet today to get you started.