If you’ve gotten a new debit or credit card lately, you might have received one that is able to be used as a contactless payment card. You’ll know you’ve gotten a new contactless card if there is a telltale contactless symbol somewhere on the card. It’s often mistaken for a WiFi signal symbol.
But before you use your new contactless payment card, there are a few things you need to know.
What Is a Contactless Payment Card?
“Tap and pay” technology isn’t new, having been around since about 2007, but it is becoming more popular worldwide with countries in Europe relying heavily on the technology more so than in the United States.
Similar to Apple Pay, Android Pay, and Samsung Pay, contactless payment cards are a faster way for customers to make small purchases, usually under $25 or $50, without the need for a PIN or signature. Contactless debit, credit, and prepaid cards can simply be tapped or waved on or near a payment terminal or register.
While most people might enjoy this new convenience, it can seem annoying to some. After all, you probably got a new “chip” debit or credit card after recent security breaches at major chain stores, such as the Target scandal, and now you’re being forced to learn another new system. If this seems like a hassle, keep in mind that these new security features are being introduced to help keep your money safe. As hackers learn new ways to steal your information, credit card companies are working hard to introduce new security features to thwart their attempts.
Because the cards feature either a radio-frequency identification (RFID) signal or a near-field communication (NFC) signal to make a secure payment at close proximity, they are slightly different from the payment apps on your phone, like Apple Pay. These mobile payment apps use WiFi or cellular data and do not have to be physically close to a sales terminal to work.
Fraud and Security Concerns
According to Visa payWave questions and answers, you must wave your card within 1-2 inches of a terminal and be correctly oriented for transactions to go through, so there is no risk of contactless payment cards being accidently read from your purse or pocket.
This also cuts down on the risk of fraud from someone reading your financial information simply by passing an enabled card reader near you in a crowded street, which is a widely publicized fear internationally.
MasterCard’s website indicates that safeguards are in place to bill you only once for your purchase, even if you accidentally tap twice.
Contactless payments made by NFC are “just as secure” as payment made with chip-enabled cards, and probably more secure than payments made with stipe-enabled cards that must be swiped, according to both American Express and Visa payWave.
In fact, the risk of fraud is also reduced by using contactless payment cards because your payment device remains in your control during payment, rather than having to hand it to a store clerk to be swiped.
If you are a victim of fraud, your contactless transactions are covered by the same fraud protection as chip and PIN transactions.
Where Can You Get a Contactless Payment Card?
Most major credit card companies, including Visa, MasterCard, and American Express, have contactless payment technology available; however, your financial institution may or may not yet offer contactless payment enabled cards. Contactless payment enabled cards do not have to be turned on or off, they are always on.
Where Can You Use Contactless Payment Cards?
Contactless payment cards can be used anywhere that has enabled terminals with the contactless symbol at checkout. This includes many popular restaurant chains, gas stations, big box stores, and more. But keep in mind that most locations have a small limit of $25 or $50 for contactless purchases. You won’t be able to make a large purchase with a contactless credit card anytime soon.
Contactless payment cards can still be used by inserting your chip or swiping if terminals are not enabled for contactless payments.
Who Can Benefit from Contactless Payment Cards?
Before you decide to get and use a contactless payment card, be certain you have a handle on your budget and finances. The ease of “tap and go” payments reduces the psychological pain you might feel if you were paying with cash or even having to sign or enter your PIN for a transaction. Merchants are counting on you using contactless payment cards to make transactions more quickly, without giving yourself time to think about your purchases.
If you are someone who’s constantly on the go, and you have your spending under control, you might benefit from contactless payment cards.