Is using contactless payments secure? How do contactless payments work? Cash payments are slowly getting replaced by other payment methods, such as credit cards, debit cards and now contactless payments. Contactless payments are becoming increasingly popular for a good reason, they’re a secure and convenient way to pay. Contactless payments are one of the most secure ways to pay.
The global pandemic has been a major catalyst for the rise in contactless payments in the U.S. and other parts of the world. International retail commerce and brick-and-mortar businesses are going cashless to reduce the risk of COVID-19 transmission.
Also called tap-and-go payments, contactless payments allow consumers to pay for goods and services without the need for swiping, entering a PIN or handing over a card at checkout. If you’ve ever seen someone tap their smartphone or hover their card over a checkout counter, that is contactless payment.
The technology behind contactless payments is a combination of radio frequency identification technology and near-field communication. An NFC-enabled credit card emits payment data through RFID frequencies when it’s near a point-of-sale terminal with contactless technology.
Most merchants who accept contactless payments have a POS terminal set up. Whenever you want to make a payment, you only need to tap or hover the card near the terminal. Information is then transmitted from your card to the bank. You’ll get a signal when the system accepts your tap — usually a green light or a beep.
Contactless payments offer many benefits to consumers. Some include:
- Speed: Contactless payments are fast. It will only take you seconds to make a payment that would have taken longer if you used a traditional debit or credit card.
- .Security: Contactless payments use nearly the same technology that powers EMV chip cards. Therefore, there’s no risk of fraud or identity theft. Further, it uses tokenization — sending a one-time token to secure each transaction.
- Convenience: Contactless payments are a convenient way for banks, merchants and consumers to conduct swift transactions.
Contactless payments are one of the most secure ways to pay. Compared to older generations of banking cards with magnetic stripes that fraudsters could use to steal data, contactless payments are safe and secure. The technology that powers contactless payments is similar to what powers Europay, Mastercard and Visa chip cards. EMV cards are less vulnerable to counterfeit fraud than magnetic stripe cards.
Tokenization also adds to the security. When you try to make a contactless payment, you are sent a one-time token to verify you’re the one making the payment. Once the transaction is complete, the token cannot be used again. This means that even if a fraudster accesses your token, they won’t be able to clone information.
Also, using a mobile wallet for contactless payments has an added layer of protection to each transaction. These wallets have an extra step to verify your request with a password, fingerprint, PIN or facial recognition before processing payment. With PaidYET, merchants and consumers can make easy one-click payments. No hardware, no software, no developer needed.
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