What is Contact-less Payments?
Contact-less Payment systems are credit cards and debit cards, key fobs, smart cards or other devices, including smartphones and other mobile devices, that use radio-frequency identification (RFID), near field communication (NFC), or Samsung Pay (MST) for making secure payments. The embedded chip and antenna enable consumers to wave their card, fob, or handheld device over a reader at the point of sale terminal. Contact-less payments are made in close physical proximity; they are usually distinguished from mobile payments which can also take place on mobile phones, but mobile payments use broad-area cellular or WiFi networks and do not involve close physical proximity. Since contact-less payments do not require a signature or a PIN, transactions sizes on cards are limited ($25 in America). Also, because of the lack of signature or PIN, transactions can be carried out faster – much to the content of both the merchant and the consumer.
How it works?
The cards contain a chip that holds your account information and an antenna that picks up power from a signal sent out by the card reader. If there is any contact-less indicator on the front of your Visa card, you can make a contact-less payment at any retailer whenever you see the contact-less symbol.
As with all payment devices, contact-less cards have a number of security features. Depending on the economic space, there may be a payment limit on single transactions, and some contact-less cards can only be used a certain number of times before customers are asked for their PIN. Contact-less debit and credit transactions use the same chip and PIN network as older cards and are protected by the same fraud guarantees. Where PIN is supported (e.g., not in the United States), the contact-less part of the card remains non-functional until a standard chip and PIN transaction has been executed.[verification needed] This provides some verification that the card was delivered to the actual cardholder. To reduce the likelihood of identity theft, a contact-less card does not contain the cardholder’s actual name; instead, a placeholder name is used.Under fraud guarantee standards U.S. banks are liable for any fraudulent transactions charged to the contact-less cards.