The Benefits of Contactless Payments

by Spero Financial

How we make purchases has changed drastically over the past few decades. Most of us used to carry cash in our wallets wherever we went. But as debit and credit cards became more widely available, we started to appreciate the ease and convenience a payment card could bring. Instead of our wallets bursting at the seams, we now simply carry a piece of plastic.

But over the last few years, card issuers have continually looked for ways to enhance our shopping experience. With debit and credit cards used as the primary payment form, we initially swiped our cards through the card reader. Then, through EMV chip technology, we inserted the card into the card reader. And now, we simply tap-to-pay. You may have already done it yourself or noticed others around you waving their cards in front of the card reader when checking out. This latest innovation has been coined contactless payment.

If you have questions about how contactless payments work or wonder whether it’s a secure way to pay, we’re here to shed some light on how these cards work and why you might enjoy having one. Fun fact: Spero debit cards and credit cards are contactless. So, as a Spero member, you can enjoy all the benefits we share!

What is Contactless Payment?

Contactless payment, also known as no-touch or tap-to-pay, is a feature of some credit and debit cards and point-of-sale systems with adequate technology. Mobile wallets and wearable devices with near-field communication (NFC) technology can also complete contactless transactions.

Contactless-enabled terminals are equipped with NFC technology. So, all you have to do is bring your contactless card or device near the terminal to trigger a transaction.

But what makes contactless payment so different from the magnetic stripe and traditional chip? Perhaps most notable is the convenience tap-and-go cards offer. Transactions are completed almost instantly, whereas chips require you to leave your card in the reader until the transaction is complete. They also rarely require you to enter your PIN, further speeding up the process.

How Do Contactless Cards Work?

Contactless payments use radio frequency identification (RFID) and NFC to process transactions. The point-of-sale system captures and processes short-range electromagnetic signals that transmit your card information. Transactions are completed within seconds, with an electronic tone or green light signaling that the payment has been accepted.

If you have a contactless card, you should see an icon that looks like the Wi-Fi symbol on the front of your card. Compatible card readers will also display this icon. When you pay, simply tap your card or hover it above the card reader.

Are Contactless Cards Secure?

When inventing the contactless payment technology, card issuers focused on security as well as convenience. In fact, contactless payments are more secure than traditional magnetic stripe technology. A contactless card or device produces a one-time code for each transaction, keeping your card information safe. NFC only works within a short physical distance, making it even more unlikely for interruptions to occur during your transaction.

One caveat to this is that contactless cards don’t require a PIN. While no PIN makes for a quicker transaction, if someone manages to get a hold of your physical card, they may be able to make purchases more easily than with a chip or magnetic stripe card. As such, in the event your debit or credit card goes missing, always contact your financial institution immediately to put a lock on the card.

Why Go Contactless?

Contactless payment methods are more than just secure — they offer other practical benefits, too.

1)   Efficient transactions

As mentioned, speed may be the most prominent benefit of contactless payments. The advanced contactless chip technology is faster than traditional methods, making transactions more convenient for consumers and merchants.

2)   Reduced contact with public surfaces

Paper money can hold more germs than a toilet (eww!), and chip and magnetic stripe cards require direct contact with card readers that countless individuals have touched. But with contactless cards and devices, you can make a purchase without touching the card reader even once. There’s a lower risk of spreading germs, creating a safer shopping environment.

3)   Less wear and tear

Because contactless cards have fewer physical interactions, they last much longer. They don’t experience the same wear and tear as other cards that must be handled by cashiers, slid through old card readers, or inserted into point-of-sale systems. And if you add your card to your mobile wallet, you don’t even have to bring the card along. Instead, simply use your phone to make the purchase.

4)   Better for travel

Contactless payment methods can relieve some of the stress of traveling. U.S. public transportation is starting to accept contactless payments, making getting from one place to another easier than ever. Contactless cards are quickly gaining worldwide acceptance, enabling seamless international travel.

5)   Fraud prevention

Contactless payment methods use advanced technology like tokenization and encryption to protect your information. Your money should stay safe as long as your card is in your hands.

The embrace of contactless payments represents a pivotal shift toward a more convenient, efficient, and secure way of making purchases. They are slowly becoming the new norm, so the more we learn and understand them, the sooner we can enjoy their convenience and benefits. Give contactless payments a try today with your Spero debit and credit cards.

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