How Does Contactless Payment Work?

Over the past few years, contactless payments methods like mobile transactions and tap credit cards have become more popular among consumers. Recent events, however, have also highlighted that this form of payment is not only convenient, but it's one of the most sanitary ways to complete a transaction.

CNBC reported that just over half (51%) of Americans use contactless payment methods - mostly to limit their use of cash amidst the COVID-19 pandemic. This includes using new tap-to-go credit cards, mobile wallets and branded payments like Apple Pay®.

Let's explore how this seamless payment method works so that next time you're at the grocery store, gas station or take-out station, you'll know what's happening behind the screen.

Does your store accept contactless payments?

Before tapping your card on a payment terminal or opening your mobile wallet, it's important to understand if the store accepts this type of transaction. Typically, the terminals will prompt you to insert, swipe or tap your card. Some may also display that they accept other popular mobile payments.

An easy way to understand if the payment terminal will process your card is to look for a common, easily identifiable symbol. The mark is four lines that appear like a sideways WiFi symbol and signifies that contactless payment is accepted. The same mark will appear on your tap-to-go credit card and you'll likely find this option available on newer cards and POS systems.

Use your smart device to complete a contactless payment.

How does contactless payment work?

As you can see, contactless payment takes two distinct forms: tap cards and mobile wallets. Depending on which method you choose, the way the payment connects to the terminal differs. Money Super Market explained that contactless credit cards use chips that emit radio waves that connect to the reader. This uses radio frequency identification (RFID) technology that is also popular for other security methods.

By holding the card near the terminal reader, your payment is easily processed without ever having to make contact with a cashier or the pin pad. When using a mobile wallet from your phone or smart watch, near-field communication (NFC) technology is used to connect to the nearest terminal. This is based on RFID technology, but allows for a smart device to transmit the information needed to complete a purchase.

Contactless payment can be a more convenient and secure way to make everyday purchases. However, it's always important to be vigilant with your cards and personal financial information. If a tap-to-go card is stolen, it may be easier for a thief to use it, as no pin is needed. Setting alerts of card activity to your phone is a good way to keep track of your purchases and any suspicious activity.

Now is the perfect time to begin ensuring your cards are able to be used without contact with payment terminals. If you have more questions about how this popular payment method works or would like to find a credit card with this capability*, contact your local Vectra Bank representative today.

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