Understanding Contactless Payments And Their Benefits

Understanding Contactless Payments

Published on June 28th, 2022

Contactless payment systems are based on RFID (Radio Frequency Identification) or NFC (Near Field Communication) technology wherein a transaction can take place without the need of physical contact between a card and the terminal.

All a cardholder has to do is wave the card in front of a contactless payment terminal to complete a transaction. Contactless credit cards are great for everyday purchases and are rapidly becoming popular among both businesses and consumers.

So, is it really time to abandon traditional chip-and-PIN payments and opt for contactless? Well, here’s the complete lowdown on contactless payment technology to help you make up your mind.

Fun Facts About Contactless Payments

  • The world’s first-ever contactless payment card was the UPass – launched by the Seoul Bus Transport Association for commuters in 1995.
  • Contactless payment technology became popular during the COVID-19 pandemic. According to a survey conducted by Visa in the U.S., 31 million Americans used a Visa contactless card in March 2020— having increased from 25 million in November 2019.
  • Contactless cards contain small but technologically sophisticated computers that communicate with card readers via short-range radio frequency.
  • A contactless card can only be read when placed four inches or fewer from a reader. So, fret not. You won’t end up using your card inadvertently.

Contactless Payments Come With A Bunch Of Benefits!

There must be very good reasons for the exponential rise in popularity of contactless payment cards! Their benefits are as follows:

  • Convenient, Easier & Faster: A payment from a contactless credit card can be completed in approximately 15 seconds, working twice as fast as a regular credit card. This naturally translates into ease of use and fast transactions with shorter queues at the checkout counter. Convenient for both businesses and consumers!
  • Extra-Secure: Contactless payment technology relies on encryption and dynamic card verification. This means that every time a transaction takes place, the computer inside the card generates a dynamic code to the reader at the payment terminal. Even if your card is stolen, it would be virtually impossible to copy the advanced encryption technology to generate dynamic codes. This will lead to the transaction being rejected.
  • Wide Usage: Today, in 2022, contactless payment point-of-sale terminals are widely available. Loyalty benefits and rewards conferred by stores too are in sync with contactless payment in which points are automatically granted at the time of payment.
  • Clean & Hygienic: Hygiene is not something that can be easily overlooked in these post-COVID times. Using a contactless credit card means a cleaner, more hygienic shopping experience as it significantly reduces the number of contact points between people.
  • Flexibility: Contactless payment technology isn’t just confined to cards. Now, you may not just wave or tap your credit card, but even your phone, or smartwatch (having connected these devices to your card) before a chip-enabled reader.

The Takeaway

The advantages of contactless payments outweigh its few cons, contributing to its ever-increasing popularity particularly among millennials and Gen-Z. If there is a credit card comparison, some contactless cards like the

IndusInd Bank Platinum Aura Edge Visa credit card, are more rewarding for customers than conventional ones.

With features like bonus Reward Points for every INR 100 spent, multiple reward redemption options, deals & discounts at restaurants through EazyDiner, and 1% waiver on fuel surcharge, the Indus Ind Bank Platinum Aura

Edge Visa credit card almost works like a bagful of goodies! What makes it one of the best credit cards with contactless feature is the fact that it comes with “Total Protect” programme which covers you for a sum up to the credit limit of your primary and add-on cards in case of fraud and unauthorised transactions.

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