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How do contactless payments work?

<p>In today’s time-poor society it’s easy to see how contactless “tap and go” payment methods have taken off, and many consumers are relishing the convenience of being able to make a purchase with the tap of a card.</p> <p>From traditional plastic cards to watches, mobile phones and even keychains you can expect contactless payment methods to continue to grow in the future.</p> <p><strong>How does it work?</strong></p> <p>This payment system all revolves around the smart chip that is imbedded in your credit card. The terminals at bars, cafes and restaurants that you use to make your payment emit high frequency radio waves, communicating information between the reader and the data on your smart chip.</p> <p>Once the chip is powered, the card and the terminal exchange security information and conduct the secure payment transaction. The amazing thing is that this whole process happens without the necessity of entering a pin and occurs entirely in less than one-third of a second.</p> <p>In terms of speed and convenience you simply can’t match this alternative to cash.</p> <p>Generally these cards with have security features that includes a payment limit on transactions and some contactless cards can only be used a certain number of times before customers are asked for a pin code. Transactions are generally protected by the same fraud guarantees as normal cards.</p> <p><strong>Are there any risks?</strong></p> <p>Despite their popularity there are some concerns about the risks of using this technology, with reports in 2012 suggesting card details could be skimmed by relatively inexpensive readers. As it stands however, the biggest security concern that would come with using this technology would be for someone to steal your card and for you to not realise immediately.</p> <p>As long as you remain vigilant contactless “tap and go” payment methods are a safe, convenient way to make smaller level purchases.</p> <p><strong>Related links:</strong></p> <p><span style="text-decoration: underline;"><em><strong><a href="http://www.oversixty.co.nz/finance/money-banking/2016/03/credit-card-balance-transfers/">Everything you need to know about credit card balance transfers</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="http://www.oversixty.co.nz/finance/money-banking/2016/03/consolidating-debt-can-be-done-for-free/">Consolidating debt is risky business</a></strong></em></span></p> <p><span style="text-decoration: underline;"><em><strong><a href="http://www.oversixty.co.nz/finance/money-banking/2016/02/story-of-the-first-atm-in-the-world/">The story behind the world’s first ATM</a></strong></em></span></p>

Money & Banking

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What you need to know about contactless credit cards

<p>Contactless technology offers a faster way to pay for retail purchases with your contactless card. For purchases under $100 at participating merchants, you don’t need to swipe or insert your card, enter a PIN or sign. Just hold your contactless card against the terminal wherever you see the contactless symbol or your card logo.</p> <p><strong>The benefits of contactless include:</strong></p> <ul> <li>Speed – there is no need to enter your PIN or sign, so it's ideal when you're in a hurry</li> <li>Convenience – it’s like having the exact change every time, so it's ideal for small everyday purchases</li> <li>Safety – your card never leaves your hands when you make a purchase</li> <li>Security – the security systems of most issuers will continue to offer you protection from unauthorised transactions.</li> </ul> <p><strong>How it works</strong></p> <p>Using contactless cards is simple. Just follow these four easy steps:</p> <ul> <li>Check that your card has the contactless symbol</li> <li>At participating merchants, where you see the contactless symbol, let the merchant know you’d like to pay using your contactless card and whether you’d like a receipt for the transaction</li> <li>When the transaction amount is shown on the terminal, hold your card within 4cm of the contactless symbol</li> <li>The terminal will indicate once your transaction is approved. Collect your receipt if you asked for one, and you’re done.</li> </ul> <p><strong>Where can I use contactless technology?</strong></p> <p>You can use your contactless card at participating merchants wherever you see either the contactless symbol or your card's logo.</p> <p><strong>Is it safe?</strong></p> <p>Contactless technology offers a fast method of payment for your purchases and is as secure as using your current card in the usual way.</p> <ul> <li>Trusted providers – All contactless transactions are processed through secure major bank and credit card networks</li> <li>No accidents – To make a purchase, your card needs to be within 4cm of the contactless terminal for more than half a second. The merchant must have already entered the transaction amount into the terminal and it must be approved, so you won’t be billed twice, even if you accidentally hold your card against the terminal more than once</li> <li>Fraud protection – Most issuers have fraud detection systems, giving you greater protection from card fraud by highlighting any unusual purchase activity</li> <li>Peace of mind – Contactless purchases are generally highly secure and backed by fraud protection which reimburses you for unauthorised transactions where you haven’t contributed to the loss and you’ve notified the issuer promptly of the transactions</li> <li>Transaction record – If you'd like a receipt, just ask the merchant before you pay.</li> </ul> <p><strong>Mobile payments</strong></p> <p>Some mobile phones now allow you to use them to make everyday purchases instead of using a card. Just hold the back of your mobile to tap and pay on the contactless terminal wherever you see the contactless symbol.</p> <p>With mobile payments, you’ll enjoy:</p> <ul> <li>Convenience – use your mobile to pay when you don’t have your wallet on you</li> <li>Speed – simply tap your mobile on the contactless terminal to make a payment</li> <li>Security – mobile payments are generally backed by a fraud money-back guarantee as well.</li> </ul> <p><strong>Related links:</strong></p> <p><span style="text-decoration: underline;"><em><a href="http://www.oversixty.co.nz/finance/money-banking/2016/01/10-important-quotes-about-money/"><strong>10 quotes that show money isn’t everything</strong></a></em></span></p> <p><span style="text-decoration: underline;"><em><a href="http://www.oversixty.co.nz/finance/money-banking/2016/01/new-zealanders-lose-millions-to-online-scams/"><strong>New Zealanders lose $12m to online scams</strong></a></em></span></p> <p><span style="text-decoration: underline;"><em><a href="http://www.oversixty.co.nz/finance/money-banking/2015/12/10-apps-to-help-you-budget-this-year/"><strong>10 apps to help you budget this year</strong></a></em></span></p>

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