Cards: contactless or non-contactless, that's the question
I'm sure you've noticed those people standing in front of you, or even next to you, at the checkout in a clothes store, for example, and making payments with their credit or debit cards without even needing to dial the classic GREEN + CODE + GREEN. Right?
Well, it's not magic or technology from another planet, these people are simply using contactless. And look, more and more people are using this system.
In Portugal, for example, the number of transactions doubled compared to 2017, but is still well below the numbers recorded in the rest of Europe.
According to Mastercard in Portugal, this figure shows that "there is still a long way to go, since contactless there is still a long way to go, since contactless transactions in Portugal represent less than 3% of total transactions, whereas in other European European countries it already represents between 30 and 50% of the total".
If we look at the overall figures, contactless is mostly used in retail used in the retail sector, accounting for 85.8% of the total number of transactions and 74.6% of the value, according to the Payment Systems Report for 2017. Systems Report for 2017.
Let's talk about cards
At Contisystems we are more than used to looking at these issues and we like to think that we even know a few things about cards.
This is exactly why why we decided to try to answer directly the question that serves as the title to this article: Contactless or Non-Contactless, that is the question?
To do so, we decided to create a list where we show you some of the advantages, of which there are many, and the disadvantages, because they also exist, of this payment system.
However, before before we start trying to find the answers you're looking for, it's important to bear in mind Banco de Portugal's definition of technology de Portugal's definition of contactless:
" Contactless cards are payment cards with proximity reading technology. These cards allow you to make payments without having to enter a PIN: to do this, you just need to bring the card close (usually less than 4 centimeters away) to an automatic payment terminal (POS) that is set up to receive contactless payments."
Advantages of contactless technology
But let's get back to the advantages of this payment method:
Greater security.
This is an undeniable advantage.
It's enough to see that the BdP itself tells us that the contactless system "offers greater security to the cardholder and greater protection against fraud attempts, since it makes it easier for them to make payments without the card leaving their hand, and without having to enter their personal code in public."
So it's clear that paying in this way allows us to maintain greater control of the process and prevents, for example, people from cloning our card by copying the magnetic stripe or chip.
To make a payment with contactless it is always necessary for the merchant to enter the amount into the POS first. The customer must always confirm the amount of the transaction before using the card.
Once the amount has been confirmed, the card is then brought closer to the POS, typically at a maximum distance of 4 centimeters from the machine, until the transaction is confirmed. The terminal does not carry out any new transactions until the current transaction has been completed.
Payment limits.
If you don't know, we'd also like to tell you that card issuers have defined a set of control elements to guarantee the security of these cards, which include measures such as: the existence of a maximum amount per contactless transaction and the imposition of a limit on consecutive contactless payments.
Possibility of deactivating the contactless system whenever you want.
A card with a contactless system retains its traditional PIN functionality. To deactivate contactless, all you have to do is contact the entity that issued your card (usually your bank) and ask for the system to be deactivated. Once deactivated, the card will work like any other non-contactless card.
Greater convenience.
With this type of payment you don't have to worry about 1 more code, or about having to hide the code from the person next to you, the person behind you and the person at the checkout 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 feature also allows you to make payments using your cell phone or smartwatch.
Visa, for
for example, through Host Card Emulation (HCE), already allows any NFC app for Android to
app for Android can enable the smartphone to emulate a smart card.
Users can wave their smartphone in front of a secure reader to
pay for their purchases.
Cards and POS terminals with contactless technology must be duly identified with the following symbol:
Despite all these advantages, DECO has left some recommendations for users of this type of technology, warning of some of the vulnerabilities of this type of system.
According to the body responsible for consumer protection, "some cell phone apps, which are free and simple to download, allow contactless card data to be read".
So, if you use public transport during rush hour, and to avoid transmitting data from your card - although you need to be in close proximity for someone with a cell phone with one of these apps installed to be able to obtain your card data - Deco advises carrying your card in an aluminum wallet suitable for cards, so that you can insulate and protect it.
Disadvantages of contactless cards
In addition to Deco's warning, and even though it is a reality reality of physical payments in Portugal, contactless contactless technology still has some limitations, which we'll present below:
Low-value transactions.
The maximum amount allowed for a transaction of this kind is generally set at 20 euros. Let's face it, that's not a particularly exciting figure, but we believe that in the near future these figures will be revised to allow greater use of contactless technology; in other words, each contactless payment cannot exceed the maximum amount allowed. This maximum value is set by the entity that issued the card.
Limit on consecutive payments.
Another limitation is the number of consecutive payments you can make without entering your PIN, which is usually 60 euros. Once this limit has been exceeded, the customer can only make contactless payments again after carrying out a transaction at a payment terminal or cash machine with the PIN code. This limit is also set by the entity that issued the card;
The system must be deactivated by the bank.
In order to deactivate the contactless function on your card, you really need to contact the card issuer, which in this case will be your bank.
Rules of use are not universal.
For this very reason, the BdP recommends that if you are traveling abroad and intend to carry out contactless transactions, you should find out about the rules applicable in the country you are traveling to.
We here at Contisystems are self-confessed admirers of this technology, because of the privacy it allows, because it makes payments safer and more convenient and because it makes your life easier.
