Surely you have noticed those people who are in front of you, or even by your side, at the cashier of a clothing store, for example, and who make payments with credit or debit cards, without even needing to mark the classic GREEN + CODE + GREEN. Right?
Well, it’s not magic or technology from another planet, these people are simply using contactless technology. And note that there are more and more people are using this system.
In Portugal, for example, the number of transactions doubled in relation to 2017, but it is still well below the figures recorded for the rest of Europe.
According to Mastercard in Portugal, this number shows that “there is still a long way to go, as contactless transactions in Portugal represent less than 3% of total transactions, whereas in other European countries it already represents between 30 and 50% of the total amount”.
If we look at the general numbers, contactless is mostly used in the retail trade, accounting for 85.8% of the total number of transactions and 74.6% of the value, according to the 2017 Payment Systems Report.
Let’s talk about cards
At Contisystems we are more than used to looking at these subjects and we like to think that we know a few things about cards.
That is exactly why we decided to try to give a direct answer the question that is the title of this article: Contactless or Non-Contactless, that is the question.
To do this, we decided to create a list where we show you some of the advantages, which are many, and the disadvantages, because these also exist, of this payment system.
However, before we start trying to find the answers that you are looking for, it is important to mention the Banco de Portugal definition for contactless technology here:
“Contactless cards are payment cards with proximity reading technology. These cards allow you to make payments without having to enter the PIN: for that purpose, simply place the card close (normally, less than 4 centimeters away) to an automatic payment terminal (APT) fit for the purpose of receiving contactless payments.”
Pros of contactless technology
But let us return to the advantages of this payment method:
This is an undeniable advantage.
Even Banco de Portugal itself tells us that “the contactless system offers greater security to the cardholder and greater protection against fraud attempts, as it makes it easier for you to make payments without the card leaving your hand, or having the need to enter your personal code in public. ”
Therefore, making payments by using contactless technology allows us to maintain greater control of the process and prevents our card from being, for example, cloned by copying the magnetic stripe or the chip.
To make a payment with contactless technology, it is always necessary for the merchant to first enter the value in the APT. The customer will always have to confirm the value of the transaction before using the card. Once the value has been confirmed, the card must be placed close to the APT, typically within 4 centimeters of the machine, until the transaction is confirmed. The terminal does not perform any additional transactions until the current transaction is complete.
If you do not know, we can also tell you that card issuers have defined a set of control elements to ensure the security of these cards and these entail measures such as: existence of a maximum amount per contactless transaction and imposition of a limit of consecutive contactless payments.
Possibility to disable the contactless system whenever you want.
The card with contactless system retains its functionality of traditional use with PIN. To disable contactless, you only need to contact the entity that issued your card (usually your bank) and ask to deactivate the system. Upon deactivating, the card will work like any other non-contactless.
With this type of payment you do not have to worry about one more code to memorize, or having to hide the code from the person next to you, the person behind you and the person waiting for your payment.
Possibility of turning your smartphone into a card.
There are debit cards, credit cards and prepaid cards that already have contactless technology. This option also allows you to make payments through your mobile phone or smartwatch.
Visa, for example, already allows any NFC app
for Android to enable the smartphone to emulate a smart card by using Host Card
Users can wave their smartphone in front of a secure reader to pay for their purchases.
Cards and APTs with contactless technology must be adequately identified with the following symbol:
Cons of contactless technology
Despite all of these advantages, DECO has left some recommendations for the users of this type of technology, alerting to some vulnerabilities of this type of system.
According to this organization, which is responsible for consumer protection, “some free and simple to download mobile apps, enable the reading of contactless card data.”.
Therefore, if you are a public transport user at rush hour and, to avoid transmitting data from your card – although close proximity is required for someone with a mobile phone with one of these apps installed to get your card data – Deco advises you to carry the card in an aluminum wallet designed for cards, so that you can isolate and protect it.
In addition to this Deco alert and despite the fact that contactless technology is a reality that is perfectly inserted in the physical payments made in Portugal, it still has some limitations, which we will now present:
Low value transactions.
The maximum amount allowed for a transaction of this kind is generally fixed at 20 euros. Let us agree that it is not a particularly exciting amount, but we believe that soon these values will be revised to allow for a greater use of contactless technology; i.e. each contactless payment cannot exceed the maximum amount allowed. This maximum value is defined by the entity that issued the card.
Limit of consecutive payments.
In addition, another limitation is the existence of a limit of consecutive payments that can be made without entering the PIN, which is usually 60 euros. Once this limit is exceeded, the customer can only re-make contactless payments after performing an operation in a payment terminal or in an automated teller machine with the PIN code. This limit is also defined by the entity that issued the card;
Deactivation of the system must be done by the Bank.
For you to deactivate the contactless function in your card you must make that request to the card issuer, which in this case is your Bank.
Usage rules are not universal.
For this reason, Banco de Portugal recommends that if you travel abroad and intend to do contactless transactions, you should try to read up on the applicable rules in the country where you are traveling to.
Here at Contisystems, we are avid admirers of this technology, due to the privacy it enables, the fact that it makes your transactions safer and more comfortable and because it makes your life easier.