Contactless payment cards explained How they work
Known as ‘wave and pay’ or ‘tap and go’ cashless and contactless cards are a method of paying for everyday items, such as coffee or newspapers, simply by swiping your credit or debit card across a reader.
Contactless payments are expected to revolutionise the way low-value purchases are made.
The big credit card companies each have their own system – PayPass for Mastercard and PayWave for Visa.
All contactless terminals will accept both PayPass and PayWave.
This particular method of payment is designed to save time for customers, reduce the risks of handling cash and mean less time dealing with purchases for retailers.
It is expected to be used most often in transactions where speed is essential, such as at cinemas, fast-food outlets, petrol stations, supermarkets and theatres.
September 2007 saw the launch of the contactless payment system, initially in London, to be followed by the rest of the UK this year.
By the end of 2008, Barclays is aiming to have 20,000 shops geared up to accept its contactless Visa cards.
A typical transaction will work as follows:
- Look for the PayPass or PayWave symbol
- When you are ready to pay, ask the merchant to ring up the sale
- Tap your card against the reader
- Within seconds the reader signals authorisation of the purchase and you can then ask for a receipt
- Then you are on your way
Your card contains a chip and a radio frequency antenna so when you tap your card against a reader it transmits payment details wirelessly.
You don't have to key in a PIN. Instead goods are paid for by touching the card on a till-side reader.
The money is then deducted from the customer’s bank account or added to their credit card bill.
In the US, contactless payment terminals are due to be installed in vending machines.
Customers tap their card on an e-Port terminal and a light flashes, the machine displays a message and then produces a tone to signal the transaction is complete.