What are contactless credit cards?

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With a contactless credit card, you can make a credit card payment without swiping or inserting it into a credit card terminal. Instead, all you have to do is put your credit card on the credit card reader. Your transaction should be processed immediately and usually does not require a signature.

Contactless payments are on the rise. Visa reported in January that nearly 20 percent of in-person credit or debit card transactions in the US are now contactless. This is likely to continue as issuers offer more contactless cards and consumers become familiar and comfortable with the technology.

If you're paying at a credit card terminal that allows contactless transactions or tap-to-pay — which many do these days — all you have to do is swipe your card. If you have one of the best credit cards available today, contactless payments give you the same rewards as swiping. Many contactless transactions take just seconds to complete, giving you more time to complete your purchases and get on with your day.

Let's take a look at what a contactless credit card is, how it works, and whether it's a safe way to pay.

What is a contactless credit card?

Each contactless card contains a chip and the ability to communicate with a credit card reader using Radio Frequency Identification (RFID) and Near Field Communication (NFC). Contactless smart cards can be inserted directly into a credit card terminal, or you can hold the card close to the terminal to activate the chip and pay over a secure radio frequency.

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Contactless credit cards are exactly the same as tap to pay, but contactless credit cards do not require tap to pay. When you see a credit card (or credit card terminal) labeled “Tap to Pay,” it's referring to contactless credit card technology.

Contactless credit cards and tap-to-pay cards also use the same symbol: a series of four curved, expanding lines. Look for this symbol on your credit card, it looks a bit like the Wi-Fi symbol on the side. That way you'll know if your credit card is contactless.

How to use a contactless credit card

Contactless credit cards are only compatible with POS systems with contactless terminals. It is more common today to encounter payment terminals that allow you to use a contactless credit card than it was five years ago. However, keep an eye out for the Wi-Fi icon on the payment terminal screen to ensure the merchant accepts contactless cards.

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Once you come across a merchant that accepts contactless payments, simply swipe your card at the card reader to start paying. You do not have to physically touch the terminal with your contactless card. Similar to your standard transaction, after a few seconds the terminal will prompt you with some completion message and you can put the card back in your wallet. It's so easy!

If you've topped up your credit card into a digital wallet like Apple Pay or Google Pay, you can also go this route by paying with your phone. Simply select the card you want to use from your digital wallet and place your device on the terminal to complete the transaction.

What are the advantages of contactless credit cards?

Contactless credit cards allow you to pay quickly, easily and securely by placing your card in the credit card terminal. Many contactless credit card transactions can be done without letting go of the card or touching the card terminal with your hand – instead, you simply hold the card against the reader. Additionally, tap-to-pay transactions are often faster than swiping, swiping, or inserting a credit card into a card reader.

Additionally, contactless payments reduce the common areas where you would normally touch your credit card when inserting or swiping it. Every contactless payment reduces card wear and tear from repeated contact with the payment terminal. Your contactless credit card should last for years.

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Unfortunately, not all card readers offer contactless technology. Even if the card terminal offers contactless payments, transactions may not always go through and you may need to swipe or insert your credit card the traditional way. If you want to use contactless payments to avoid touching the card terminal entirely, be aware that some retailers and card issuers may still require you to use the card terminal to sign your purchases.

However, more credit card terminals allow consumers to make contactless payments, fewer contactless transactions require signatures, and the tap-to-pay process continues to run more smoothly.

Are contactless credit cards safe?

Contactless credit cards are as secure as any other type of credit card. Contactless transactions may even be more secure than traditional transactions due to the unique way the card communicates with the credit card terminal.

Contactless credit card security not only uses tokenization to convert your credit card number into a random string of alphanumeric characters, but it also creates a unique encrypted code that ties your card to the transaction. These two measures make it very difficult to hack or steal information from contactless credit cards.

Some people wonder if they accidentally pay with a contactless card – for example, if you're standing behind someone at the checkout, will your contactless card suddenly activate and pay for someone else's purchase? Since a contactless credit card can only communicate with a card reader at a distance of two or three inches, you don't have to worry about accidental payments.

Others wonder if they need to invest in RFID protection, such as B. Wallets designed to block RFID frequencies. Do not worry. RFID credit cards already have multiple layers of security. While you can buy an RFID blocking wallet or wallet, you are better off using other methods of preventing credit card fraud, such as B. Check your credit card statement and sign up for mobile fraud alerts.

Final result

You probably already have a contactless smart card in your wallet – many of us have it, thanks to the recent introduction of contactless cards. More and more consumers are opting for contactless payments, and the combination of speed, ease of use, and contactless credit card security has made Tap-to-Pay a very popular payment method.

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