Some may say the future of today, some may say the future was the past – but with contactless payment systems, we believe it’s the future of today, and will be a critical part of our past, eventually of course. In this article, we’ll highlight contactless payments and discuss why this trend is a movement worth investing in. Let’s dive in!
What Are “Contactless” Payments?Contactless payments are any form of payment that’s digitized without the need of physical touch. Typically, contactless payments are found in apps such as Apple Pay, Samsung Pay, or Google Pay (GPay) – however, many retailers are starting to accept a new form of contactless payments which functions behind new technology, known as NFC.
How Do Contactless Payments Work?Contactless payments work similarly to traditional payments (for example, swipe). With swipe cards, it’s considered physical and works by swiping a card into a credit/debit card processor which reads a magnetic stripe, and decodes the information into a readable format, and then the processor works with the merchant to withdraw / pend funds from your account. Contactless payments work by utilizing technology called NFC. With contactless payments you typically tap your debit, credit card or phone onto a credit/debit card processing terminal, and then the processing terminal reads the NFC chip/tag and decodes it into a readable format, exactly like magnetic stripe cards. The biggest difference between contactless payments and traditional magnetic stripe cards is security. We’ll dive into that a bit deeper next.
NFC Technology Is Superior to Magnetic StripesTo put this simply, NFC is far harder to replicate than magnetic stripes. This is for two reasons:
- NFC is less-hacked because it’s newer technology
- NFC uses a deeper encryption level and relies on far more security check steps throughout a transaction