Many small businesses are considering contactless payments for their fast, convenient, and sleek functionality. Whether you’re an early adopter or curious about the technology, it’s essential to understand how contactless payments work and how you can use them safely.
Contactless payments are made with a credit card linked to a smartphone, wearable device, or payment app. These devices have advanced security features that prevent skimming and other types of fraud.
Know Your Limits
Contactless payments have surged in popularity during the COVID-19 pandemic as consumers and businesses look for ways to reduce friction at the point of sale. These tap-to-pay credit cards and mobile wallets allow you to pay without physically inserting or swiping your card, which speeds up the checkout process and prevents cloned and compromised card transactions.
However, contactless payments have their risks. When used in crowded places or near a card reader, criminals can capture your payment data and use it to make unauthorized charges on your card. This type of fraud is known as card skimming, and it’s something to remember when using your contactless card in public.
As a security measure, many credit card issuers have imposed limits on the amount spent with contactless transactions. These limits may be total or transaction-based and vary by country and bank.
In addition, some consumers store their contactless card information on digital wallets, which can be accessed with a smartphone or wearable device. These wallets generate a unique one-time code to confirm each transaction and are much more secure than magnetic stripe credit card transactions. It’s still a good idea to lock your phone or tablet when not in use and set up transaction notifications so you can quickly spot any suspicious activity.
Keep Track of Your Transactions
To use contactless payments, consumers must have a compatible device, such as a smartphone or wearable, with a digital wallet app installed. When a consumer taps or hovers the device near the point-of-sale terminal, NFC technology communicates with the payment terminal to initiate the transaction.
While some believe thieves can use “electronic pickpocket” contactless cards and digital payment methods to steal their personal information, this is mainly false. Information is only transmitted to the merchant’s payment terminal in encrypted form when making contactless transactions. This information cannot be read by devices that clone magnetic stripe cards.
Contactless card payments are also subject to the same fraud protection programs as chip and PIN credit and debit cards. For instance, card issuers may impose transaction limits on single contactless payments and require cardholders to enter their PIN for purchases over certain thresholds.
In addition, many contactless cards and apps feature two-factor authentication, such as fingerprint recognition. This helps to protect the user against unauthorized payments even if their device is lost or stolen. As the popularity of contactless payments continues to rise, consumers and small business owners need to understand how this technology works and how to use it safely.
Keep Your Device Safe
Contactless payments offer many benefits to businesses and consumers but can raise security concerns. Some people worry that the convenience of merely tapping their card against a terminal or hovering it just above it could open them up to scams.
Fraudsters might use contactless payments to steal credit card data, but many factors can help keep these devices safe. For example, contactless cards are authenticated, which means that even if someone were to hack into a system, the data they would get isn’t as valuable as the information from a magnetic stripe or chip-and-PIN card. Additionally, most contactless cards have transaction limits and require a PIN or signature to make transactions over a certain amount, so it’s less likely that you could end up with unauthorized charges on your account.
Finally, many contactless payment options allow users to connect their card with a mobile device to make a purchase. That way, they don’t have to touch a point-of-sale machine or any potentially contaminated equipment, which can provide peace of mind for customers worried about germs and viruses.
In addition, some contactless cards can be shielded with tin foil or other materials to prevent RFID scanning (or skimming) of the card when it’s in your wallet or purse. So, while these technological safety measures are in place, it’s also important to be vigilant and protect yourself by keeping your devices secure, not leaving them out in the open, and constantly requesting a receipt for your purchases.
Keep Your PIN Secure
Contactless payments use radio-frequency identification (RFID) technology to allow you to complete a transaction simply by holding your card or mobile device near a payment terminal. The contactless payment process can be used for debit, credit, prepaid, or m-commerce cards. You can also use contactless apps and digital wallets on smartphones or other devices that support the technology.
In the case of contactless payment, a special chip inside the card sends out an encrypted code used to process a purchase. This code is complicated for hackers to crack, and the fact that a transaction requires no PIN reduces the risk of unauthorized charges. Many credit cards and banks have a minimum spending limit when using the contactless feature. However, unauthorized transactions can still occur. You should contact your card issuer and bank when suspicious activity occurs.
Additionally, you should keep your payment device secure – don’t leave it in pockets or bags that could draw pickpockets’ attention, and don’t let anyone else hold your smartphone or wallet while you’re making a purchase. You should also request a receipt for every purchase and check your bank statements regularly to see any unauthorized transactions.