Starting with just a handful of users back in the 1990s, the amount of contactless cards circulating in 2021 reached well over 190 million. Mobile contactless payments are also on an upward trend, with at least 43.9 million users making this kind of transaction in 2021.
What are Contactless Payments?
Contactless payment is a method of paying for products or services without physically tapping or inserting your card into a terminal device. In most cases, you just have to hold the card or mobile device over a reader for it to work. Although contactless cards are usually used by customers who want to pay for small consumables, mobile contactless payments are becoming increasingly popular among buyers of bigger products such as electronics and furniture.
The Advantages/Benefits of Contactless Payments
The advantages of contactless payments are numerous. They are extremely quick and easily usable in situations where you don’t have your wallet or purse on hand, such as buying something from a vending machine.
A contactless payment system works through a mutual authentication between a card or mobile device and a terminal. This means that the issuer of the card controls whether it is really you trying to make a payment, so even if someone stole your credit card number, they couldn’t use it without your PIN/password or fingerprint.
Contactless payments are very secure as every transaction has to be authenticated with different hardware depending on how much money you’re spending. Even if someone managed to copy all the data from one of your cards, they wouldn’t be able to clone it because each clone would require its own encryption key.
Many countries have started putting chips in their cards that store information beyond just account numbers and expiration dates, such as owner’s biometric data, making them ever more secure against fraud and data breaches.
Contactless Payment With a Credit Card/Debit Card
The most common way to pay using contactless is through your credit or debit card. Simply hold the card over the reader for it to work, as if you were doing any other type of transaction with that specific card. You can also use this method to pay for public transport with contactless cards and mobile devices in some cities around the world.
Mobile Contactless Payments
The easiest way to pay via your phone is by holding it up against an NFC-equipped terminal capable of receiving wireless signals from your device. In case your target terminal isn’t NFC-equipped, you can use an NFC tag to make your phone connect wirelessly with the target device.
Contactless Payment With a Wearable
Wearable contactless devices are also becoming more popular, especially among people who want to quickly pay for something without having to reach into their pocket or bag. The Wocket Smart Wallet is considered by many to be the best example of this technology because it stores account numbers for thousands of different cards and can even generate new temporary card numbers if your main card number gets compromised somehow.
Other Contactless Payment Methods
There are also other ways that you can pay using contactless such as:
- Using your mobile device as a car key (Ford)
- Making online purchases via smartwatches (Apple Watch)
- Paying for bus, taxi, and train travel with QR codes
- Using an RFID-equipped card or keychain to unlock your vehicle
What Contactless Payments Will Be Like in the Future
The future of contactless payments looks very promising. All the different possible payment methods, such as wearable and mobile payment, make them more efficient and less cumbersome to use than current ways of transacting money or making purchases.
As we move into an increasingly technology-driven world, where everything is connected with the internet , we will undoubtedly see a greater number of new and innovative means of paying for things and transferring money without even needing to reach for our wallets.
So many possibilities exist for how we can pay in the future that it’s impossible to predict what might happen over the next ten years. What seems likely though, given these technologies’ increasing popularity, is that contactless payments will become more widespread.
There are several new contactless payment methods that are currently in development. Most of them will use NFC technology but there is also RFID (Radio-frequency identification) contactless payments which allow customers to make agreements with their bank or credit card issuer so they can pay different merchants by touching their phone against the merchant’s POS device.
As more people start using cashless means of transaction because it’s quick, secure, and efficient, the number of businesses offering payment via mobile devices will only continue to grow.
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