Contactless payments are super convenient. There’s no swiping, no rummaging through your bag trying to fish out coins while balancing a coffee on a tough Monday morning, and no scribbling a rushed signature because of a long line behind you.
Just one tap, and you can be on your way.
These cards are so easy to use, in fact, that they might make you wonder if they are even secure. Could a criminal hack into your card and steal your money just as easily as you make payments?
Here are all the ways contactless payments are more secure than other methods.
First Line Of Defense: Physical Reach
Contactless cards rely on NFC—a derivative of RFID technology—and host a chip that communicates to POS terminal requests via a frequency range of 13.56 MHZ. Even though different systems use their own standards, for example, Visa payWave or American Express ExpressPay, they are all based on the same technology.
The physical reach of NFC is relatively small, coming to just below an inch, which means it’s hard to make a payment using your card at a distance from the reader.
Contactless payments work on the same principle as EMV credit cards, i.e., by generating a unique transaction code for every transaction that can’t be reused.
One difference, however, is that EMV security relies on a combination of uniquely generated keys along with a PIN code added in by the user, whereas, in the case of contactless payments, there is no PIN involved.
This means that the contactless process is limited to encryption keys generated by both the card and the terminal.
Final Call—Transaction Value Limit
These limits make sure that in case your card does get hacked into for some reason, there is a limit to the amount of money you can lose in a day. This makes sure that you don’t go completely broke, and also buys you the time to do something about it and contact your bank.
This limit value is coded into a POS terminal and differs from provider to provider. Exceeding this limit also means that the person carrying out the transaction, will be asked for a PIN or some other form of verification.
Even though conventional payment systems work alright, there is always a risk of loss, and falling victim to crimes like credit card fraud and identity theft.