Explained: Contactless cards, what is the technology used, the security issues and more – Times of India

What are contactless cards?

Contactless cards allow customers to pay for goods and services without the need to physically insert a card or enter a PIN. It is a quick and convenient way of making a payment, and it has become increasingly popular in recent years. Contactless payment can be made using both debit and credit cards.

What is the technology used in contactless cards?

The technology used in contactless payment is called Near Field Communication (NFC). NFC is a type of wireless communication that allows devices to communicate with each other when they are in close proximity. In contactless payment, the NFC technology is embedded in the payment card, and it allows the card to communicate with a payment terminal when they are brought close together.

How are payments processed with contactless cards?

The payment process is very simple. The customer taps or waves their card near the payment terminal, and the payment is made. There is no need for the customer to enter their PIN, and there is no need for the card to be inserted into the terminal. The payment is completed in seconds, and the customer can be on their way.

What are the advantages of contactless cards?

There are several advantages to contactless payment. Firstly, it is very quick and convenient. Customers can make a payment in seconds, which is ideal for busy people who are always on the go. Secondly, it is very secure. Contactless payment uses advanced encryption technology to protect the customer’s personal information, and it is virtually impossible for fraudsters to intercept the payment data. Finally, it is widely accepted. Contactless payment is now accepted by most retailers, and it is becoming the preferred payment method for many customers.

Are contactless cards safe and secure?

There are some security issues that come with contactless cards. One of the main concerns is the risk of fraud. While contactless payment is very secure, there is always a risk that a fraudster could intercept the payment data and use it to make fraudulent transactions. To combat this risk, payment card issuers have introduced a range of security measures, such as transaction limits and PIN verification for high-value transactions.
Another concern is the risk of card skimming. This is where a fraudster uses a device to steal the card details from a contactless payment card. This can be done by simply standing close to the customer and using a device to intercept the payment data. To prevent this, payment card issuers have introduced a range of anti-skimming measures, such as encrypted card data and tamper-proof card chips.
There is also a risk that contactless payment could be used for money laundering or terrorist financing. This is because contactless payment is very quick and can be used to make multiple small transactions without the need for PIN verification. To prevent this, payment card issuers and retailers are required to comply with strict regulations and guidelines that are designed to prevent money laundering and terrorist financing.
Contactless cards are a relatively safe and efficient way of making a payment and are likely to become even more popular in the years ahead.