How credit card contactless payments work
Contactless payments are a popular way to pay. Here we cover how ‘tap and go’ works on credit and debit cards, the limits on spending, and what happens if your card is stolen.
In an age where convenience is king, contactless payments have emerged as the crown jewel of transaction methods. From the morning coffee run to the late-night grocery haul, the ability to tap-and-go is transforming the way we interact with money. Let's delve into the world of contactless payments and explore how this technology is reshaping our spending habits.
What is a contactless payment?
Contactless payment is the modern-day magic of money handling. Imagine tapping your credit/debit card or smartphone over a reader and—voilà—the payment is made without the need for a PIN or signature. It's a simple, swift, and secure way to make purchases, and it's taking the retail world by storm.
The surge of tap-and-go
The COVID-19 pandemic has been a catalyst for change in many areas, not least in the realm of contactless payments. As cash usage dwindled for hygiene reasons, tap-and-go transactions became the norm. Today, you'd be hard-pressed to find a retailer that doesn't welcome this method with open arms.
Setting up for contactless success
You can set up your credit card or debit card for contactless payments on the card itself (through your bank), with your mobile phone, smartwatch, or other contactless devices. Contactless payments are also often referred to as 'tap-and-go' by some banks and retailers.
The mechanics behind the magic
Contactless cards are embedded with RFID technology that allows them to communicate with payment terminals via radio waves. To make a payment, simply hold your card near the terminal and let the technology do the rest.
Recognising the contactless symbol
Keep an eye out for the contactless symbol—a set of four curved lines that echo the familiar Wi-Fi icon. You'll find this symbol on the back of your card and on compatible payment readers, signalling where the tap-and-go magic happens.
Making a contactless payment
Using a contactless card is a breeze. Just look for the contactless symbol on the payment terminal, tap your card against it, and wait for the green light—or a beep—to confirm your transaction is complete.
Understanding the limits
As of 15 October 2021, the contactless transaction limit was raised to £100, allowing for larger purchases without the need for a PIN. However, for mobile phones, the sky's the limit, while smartwatches might ask for a button press for added security.
Where can you use contactless?
The world is your oyster with a contactless card. Most retailers, eateries, and public transport services are on board with tap-and-go, though some may set a minimum spend.
Weighing the pros and cons
Contactless cards come with a host of benefits:
Speed: Transactions are lightning-fast.
Convenience: No fumbling for cash or remembering PINs.
Security: Enhanced protection against fraud.
Hygiene: Less contact means fewer germs.
But there are drawbacks to consider:
Theft Risk: If lost or stolen, unauthorized taps could occur.
Limited Abroad Use: Not all countries are contactless-friendly.
Overspending Temptation: The ease of use could lead to impulse buys.
Activating your contactless card
New contactless cards need a Chip and PIN transaction to kickstart their tap-and-go capabilities. Your bank will guide you through the activation process, ensuring you're ready to tap away.
Safeguarding your contactless card
Contactless chips generate unique codes for each transaction, making it tough for fraudsters to replicate. Banks keep an eye out for any suspicious activity and may occasionally ask for a PIN to confirm it's really you.
Protecting your payments
Concerned about the safety of your credit card? Our guide explains how credit card protection works, giving you peace of mind as you tap your way through transactions.
Our expert says...
"Technology has moved on in leaps and bounds in the last few years, thanks largely to the Coronavirus pandemic when many retailers stopped accepting cash and shoppers often had no choice but to use contactless payments. There are many benefits too, they’re easy, quick, and eradicate the hassle of rooting around for your payment card and remembering multiple PINs. Yet as with anything new, it’s important to be extra vigilant and to report anything suspicious as soon as you spot it."
Other useful guides
For those eager to learn more, MoneySuperMarket offers a wealth of guides:
Compare credit cards with MoneySuperMarket
Before you dive into the world of contactless, it's crucial to choose the right credit card. MoneySuperMarket's eligibility checker offers a glimpse into your chances of approval without denting your credit score. It's a smart way to compare your options and make an informed decision.
As a credit broker, MoneySuperMarket earns a fee from lenders but rest assured, our services come at no cost to our customers. We're here to help you navigate the financial seas with ease.
Contactless payments are more than just a trend; they're the future of financial transactions. As we embrace this technology, let's enjoy the convenience it brings while staying mindful of our spending and security. Happy tapping!
What if the contactless card doesn’t work?
If your contactless card doesn’t work, you should contact your card provider and request a replacement.
If you’re trying to pay for something and your contactless payment doesn’t work, just insert your card and enter your PIN for the transaction to go through.
Can I opt out of a contactless card?
If you’d prefer to opt out of having a contactless credit card, it’s best to contact your bank or card provider. Whether you can opt out of having a contactless card will depend on who you bank with. If the bank isn’t able to let you ‘opt out’ of contactless it may be worth comparing credit cards, to find a provider that better suits your preferences.
How do the payments show up on my bank statement?
When you make a contactless payment, your transaction will show on your bank or credit card statement with the universal contactless wave symbol next to it.
It’s wise to keep an eye on your payment history, just as you would with chip and PIN transactions and bank transfers. If you notice anything suspicious or unfamiliar contact your bank immediately.
What happens if I am charged multiple times for the same transaction?
Being charged twice for one transaction when paying with contactless is highly unlikely. This is because once you’ve placed your card or smartphone on the card reader, the transaction is complete.
Payment terminals have been designed to prevent you paying for the same thing twice, so the chances of you getting charged double are highly unlikely.
Some terminals will ask you to only present one card if it can detect two, while others might cancel the transaction entirely to avoid overcharging.
Can I use my contactless card abroad?
You should be able to use your contactless card abroad if the option to pay with contactless is available to you. If the retailer doesn’t display the contactless symbol on their card reader, you may have to pay by inserting your card into the card reader and punching in your PIN or with cash.