Contactless Technology: The Future of Contactless Payments

Technology has revolutionised the way we conduct financial transactions, making a significant impact on the payments landscape. Consumers are seeking fast and secure payment options, and this is where contactless technology comes in. In this article, we will delve into what contactless technology is, how it works and why it is becoming a global trend.

What is Contactless Technology?

Contactless technology is a form of communication without direct physical contact that allows users to make payments simply by bringing their credit card or smart device close to a payment terminal. Unlike traditional methods that require the use of a magnetic stripe or chip, contactless uses NFC (Near Field Communications) technology to instantly transmit the necessary data to authorise the payment. When the device is brought near the reader, a connection is established, enabling the secure transmission of data.

How does Contactless Technology work?

Contactless technology operates through the transmission of data via NFC. Both credit and debit cards, as well as smartphones or smart devices, can be designed with the necessary NFC technology to facilitate contactless payments.

When a user wants to make a payment, they simply bring their bank card or smart device close to a contactless-enabled payment terminal. The payment system and the card or device establish a wireless communication over a short distance, through which the necessary data to authorise the payment is transmitted. This data transmission is secure and takes place virtually instantaneously.

Advantages of Contactless Payments

Contactless payments offer a number of advantages for both users and card issuing banks. 

• Speed and Efficiency: Customers can make purchases in a matter of seconds, streamlining the payment process, especially for low-value transactions and in crowded environments.
• Enhanced Security: In terms of security, contactless payments are considered more secure than traditional payment methods. The technology employs advanced security measures, such as data encryption and tokenisation, reducing the risk of fraud.
• User convenience: With contactless payments, users don’t need to search for cash or insert cards into the payment terminal. Simply bringing the device close to the reader completes the transaction, enhancing the user experience by making it more convenient and hassle-free.
• Versatile technology: Contactless technology is not just limited to debit or credit cards; it also extends to mobile devices. Users can load their cards on mobile applications like the Orain App, NFC tags or digital wallets such as Apple Pay or Google Pay, providing additional flexibility.
• Flexibility: contactless payment devices can be used in retail stores, restaurants, hotels, public transport, events, concerts and self-service machines such as vending machines or coffee vending machines.

The Rise of Contactless Technology

The use of contactless technology has experienced significant growth in recent years and this trend is expected to continue in the future. According to a report by Visa, there are already millions of active contactless payment terminals and cards in Europe, and the proportion of payments made using this technology has increased considerably in recent years. COVID-19 has further accelerated the adoption of contactless payments, as consumers seek payment methods that minimise physical contact and reduce the risk of contagion. 

In short, contactless technology has revolutionised the way we make payments. Its convenience, speed and security make it an increasingly popular choice for consumers and merchants around the world. As technology continues to advance and consumer needs evolve, contactless payments are likely to continue to gain ground in the world of electronic payments. Discover the benefits of implementing Orain IoT Payments Pro contactless payment systems at your self-service points of sale!