All You Need to Know about Contactless Credit Cards

Could you pay with your credit card by tapping it on the card machine? 

More than 60% of card machines in retail stores have the  equipment to handle contactless card transactions. Thus, without swiping your card you can make payments of up to ₹5,000 as per Reserve Bank of India (RBI) guidelines .

Using contactless credit cards has several benefits. One of them is that the payment process becomes way easier and quicker. Moreover, it increases the security of your information and keeps your hands off the card reader.

Continue reading to learn more about contactless credit cards, their features and usage.

What Is a Contactless Credit Card?

Contactless credit cards work in a very similar fashion to a mobile wallet. It has a Wi-Fi symbol. You can complete the transaction by simply tapping or holding your card over a contactless-enabled card reader machine.

Instead of a magnetic tape, this card has a technology-embedded chip through which you can make payments over a secure radio interface. Therefore, you can make payments without swiping your card or having to enter your PIN in the card reading machine.

Just tap your card on the card reader or wave it from a close range to make payments.

How to Use a Contactless Credit Card to Make Payments?

Follow these steps to make contactless credit card payments:

Step 1: Check if the card reader or the checkout terminal of the store has the contactless Wi-Fi symbol b5VXXZDZ oQ8aQ2le 5tNX3w3A5O5wM1I2ihevuYgCoHMO9GLlMUUlwGAZJpqOWUlnQIiXE xnZ6OIrZAZQVeyO2K8bkzAS9Tf2KQCCEG8W KojHsmRb1qTcsfZsQZqxw ww9gKSnKjj.

Step 2: When prompted, you must bring your card within a few inches of the contactless symbol. With some of the Point of Sale (POS) machines, you might also have to tap on the screen.

Step 3: Within seconds, your payment is securely processed. You will hear a beep or see the light indicating a successful payment.

How Does a Contactless Credit Card Work?

A contactless credit card uses Radio Frequency Identification (RFID) technology. This card has a chip as well as a radio antenna. The antenna picks up the signal when it is close to a card reading machine. The antenna picks up this signal and allows the transmission of the credit card information to the card reading machine.

Here is how the card reader completes the payment process in a contactless credit card payment:

Step 1: After tapping the contactless card or bringing it near the POS machine, it generates a unique cryptographic code, thus initiating the transaction process.

Step 2: This card reading machine transmits the card-related information to a card processing network like American Express, VISA or Mastercard. The network checks the provided data for possibilities of fraud.

Step 3: After the verification, the card processing network forwards this request to the respective card issuer.

Step 4: The card issuer first checks the available balance. Then, it checks whether it is a stolen card or shows an unusual location or a substantial amount. 

Step 5: After the verification, the card issuer authenticates the transaction and sends the approval message to the merchant’s card reading machine. This whole process should take less than a few seconds to complete.

Are Contactless Credit Cards Safe to Use?

Contactless credit cards are those with an embedded microchip designed to enable secure payment at POS terminals.

Unlike credit cards with magnetic stripes, these cards, through microchip technology, keep the cardholder’s information safe and secure. Moreover, through its cryptographic computation, it keeps the card safe from hackers when connecting with a POS terminal and processing network. Furthermore, these cards continuously develop security features, introducing new defence mechanisms like Dynamic Data Authentication (DDA).

They rely on public-key cryptography, using one key to generate a valid cryptographic code sent to the POS terminal. This cryptographic code is unique for every transaction, proving the card’s authenticity. The POS terminal uses its second key to validate this code.

Since the card’s microchip is powered wirelessly by proximity to its POS, only a genuine POS terminal can process a transaction initiated with such credit cards.

Top Contactless Credit Cards in India

If you are looking for a contactless credit card, here are some contactless credit card options in India: 

LenderJoining Fee (₹)Annual/Renewal Fee (₹)
SBI Signature Contactless Card4,9994,999
HDFC Regalia Credit Card1,0001,000
ICICI Bank Contactless Card500500

Note – the actual prices may differ, you’re advised to enquire about the same with your credit card issuer before opting for any option.

Final Words

Contactless credit cards have a host of benefits for their users. First, it is easier to use, as you do not have to swipe the card. Instead, you only need to tap on the POS machine or WiFi symbol near the machine. Furthermore, these credit cards are way faster, allowing completion of transactions within seconds. However, you need to ensure that you set a maximum per day transaction limit to avoid issues in case of theft. Moreover, these days there are special wallets available that secures the card from electromagnetic radiation, illegal RFID-scanning and other outside influences.

Frequently Asked Questions (FAQs)

  1. Can someone read a contactless credit card from a distance?

No, it is a misconception that fraudsters can extract data from contactless credit cards. The near-field communication technology of these cards uses a 13.56 MHz radio frequency technology which only transmits data within a range of 4 cms.

  1. Can someone clone a contactless card through short-range skimming?

There are no known ways for fraudsters to clone your contactless credit card.

  1. Since contactless credit cards do not use a PIN, would I lose a lot of money if it gets stolen?

You will only lose a little money if your contactless credit card gets stolen. In fact, according to (Reserve Bank of India) rules, you can make a maximum transaction of ₹5,000 per transaction. Thus, it would limit the total losses even with a stolen card. However, you should ensure that you set a maximum per day transaction limit to minimise losses in case of theft.

  1. How to know if the credit card has a contactless facility?

If your card has a contactless indicator symbol, which is similar to a Wi-Fi symbol, on its front or back side, you can use it to pay in a contactless manner. However, you can also disable it to use it like a normal credit card.

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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The article may also contain information which are the personal views/opinions of the authors. The information contained in this article is for general, educational and awareness purposes only and is not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision, whether related to investment or otherwise, taken on the basis of this article.

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