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What you should know about contactless payments

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The less we interact with people, the safer we feel. With contactless payments, you don't hand over your card, use a touchpad, or sign a receipt.

What are contactless payments?

Most contactless payments take one of two forms. One is when you use your smartphone or smartwatch to pay for a purchase -- no card needed -- through Apple Pay or Google Pay. The other is when you use a contactless-enabled debit card that you hold near the card reader. Both methods use the same Near Field Communication (NFC) technology that allows you to simply tap your device or card at a checkout terminal to pay.

The term "contactless" means that you don't need to swipe or insert your card into a card reader. Instead, you can "tap to pay" at the point-of-sale (POS) terminal in stores or restaurants that accept payments through NFC technology. This means you just need to hover your card or device near the terminal for it to accept the payment data.

What are the benefits of contactless payments?

One key reason people are using contactless payments today more than ever is that, well, they are contactless. The less we interact with people in stores these days, the safer we feel. With contactless payments, you don't need to hand your card to someone else.

Besides the safety aspect, contactless payments are convenient and can save time since you don't need to wait to sign unless you have charged over the acceptable limit. (Each store might have their own rules.) You may be able to skip a line, as some retailers are equipping their associates with contactless POS systems that can be used anywhere in a store or restaurant.

How do I know if my payment card is contactless-enabled?

Look for the contactless symbol contactless symbol on either the front or back of your card. Cards that are compatible with contactless terminals will have a series of four nested curved lines on it, sort of like a Wi-Fi symbol but sideways.

Are contactless payments secure?

Contactless payments use a secure technology, similar to your chip card. Each contactless transaction made with a smart device or payment card uses a one-time code that protects your payment information,2 much like your chip card does. And don't worry that you might inadvertently pay for something just by walking past a check-out terminal -- you have to put your card or device within one to two inches of the terminal to trigger a transaction.

How do I decide if a mobile payment or contactless card payment is better?

Many people confuse the two types of contactless payments. The difference is that contactless mobile payments use a device, such as your smartphone or smartwatch, while contactless card payments require the use of a physical card.

The decision about which one to use is simply a matter of choice and convenience. If you prefer using a physical card rather than adding payment data to your phone, a card might be better. If you choose to use your phone, keep in mind that some brands might also integrate your loyalty card with your mobile wallet, making it that much easier to collect rewards.

How do I know where I can use contactless payment methods?

Wondering if your retailer has contactless payment capabilities? For Tap to Pay, just look for the contactless symbol contactless symbol on the payment terminal -- the same symbol that you'll find on your contactless-enabled card.

For mobile payments, look to see if the payment terminal features your app's brand symbol (such as Apple Pay). Usually you will see a sticker that mentions the types of payments that are accepted. Or you can always ask an associate.

Contactless payments are a safe and secure way to make purchases today. Contact your bank to learn more about how this type of card can work for you. 

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

  1. National Retail Federation, Coronavirus leads to more use of contactless credit cards and mobile payments despite cost and security concerns," published August 6, 2020, accessed September 15, 2020. Back
  2. Ben Luthi, "Should You Be Worried About Tap-and-Go Credit Cards? " Published June 6, 2019, accessed October 2, 2020. Back