The Advantages of Contactless Payments

Tap and Go with no Compromise on Security

Written by Rebekah Moss 10 Dec 2019 - 3 minutes reading time

With contactless payments on the rise; accounting for nearly half of all debit payments in the UK in July 2019, let’s break down the advantages of the new age’s ‘cash’.

Whilst this was the first time for transactions to reach this level in the UK via the payment method - with services and goods being paid for by contactless over 647 million times - on average, one in four card payments are paid for by contactless each month.

Whether it be by credit or debit, the trend of abandoning cash and switching to contactless is on the rise and all too convenient, with no compromise on security.

In 2017, the number of contactless payments in the UK totalled 5.6bn transactions, with 78% of the 116 million cards that year being contactless enabled; a popular choice amongst 77% of 25-34 year olds.

What is a contactless payment?

Contactless payments can be made via debit, credit, smartcards - such as prepaid oyster cards and gift cards - and phones using the scalable NFC and RFID card emulation.

Facilitated by a chip that sits within your typical credit or debit card, a contactless payment uses near field communication, that was developed from radio frequency identification (RFID), to function. As the use of NFC developed, contactless functionality has been upscaled into other devices - as mentioned - alongside wearable items and accessories that make payments.

A contactless payment is made by holding these cards or devices within close proximity of a pin terminal or NFC reader to issue a payment to the acquiring bank.

As NFC readers are programmed to read one NFC chip at a time, only the closest chip will be read first, dispelling any worries that two or more cards could be charged mistakenly.

Also known as a Tap and Go service, customers can actually be as far as 4cm away from a terminal when making a contactless payment.

Is it safe?

Whilst the security of a contactless payment uses the same encryption as a chip and pin, the further use of a contactless payments via smartphones uses tokenisation to substitute your card data, so you don’t need to worry about your card being cloned or account details being stolen in the case of phone theft. In these instances, it is likely that two-factor authentication is also required to make a payment.

In a study conducted by the UK Cards association, there has yet to be a confirmed report of monetary theft via a contactless card whilst it remained in the cardholder’s possession.

The downsides:

Spending caps on contactless payments can be considered a limitation of the service, wherein actuality it is another security measure to protect against unlimited spending via contactless should a card end up outside of the cardholder’s possession. Due to new SCA regulations, a PIN may also be required in some instances. For concerns regarding postal fraud, customers should contact their bank if they have not received a card within 10 working days.

The large increase in contactless payments is largely in thanks to the public transport system. However, due to the methods in which the London Underground system operates, card clashes are common occurrences when a passenger fails to tap in and out with the same card. This means they are charged twice the maximum daily fare.

Contactless payments are only as old as the generation most popular for using them - Millennials. In the disuse of cash, the easy reach of smartphones to facilitate contactless payments for use almost everywhere including the public transport system; that has since gone on to take apple pay, demonstrates the evolution of a service that originated in the 1990s and first became available in the UK in 2008 for retail purposes via the EAT restaurant.

Total Processing is a leading payments provider, capable of processing solutions that facilitate apple and google pay, as well as NFC enabled terminals across the e-commerce and point of sale industries - with IVR due in Q1 2020.


**To learn more contact us on 0330 122 6148. **


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