Contactless cards recent technology have been welcomed by a significant speculation upon their debut in the market. While a significant portion of the tech community hails the presence of the aforementioned innovation as a great facilitator for both customers and retailers, others have come to see its multiple functionalities as a threat to security. What many do not realize, however, is that most of the negative things that are said about contactless cards are often rumors. In fact, the novel method of payment would be one of the safest ways to effectuate a transaction. And in addition to being safe, contactless cards also add a plethora of options and facilities to their owners.
Mobile payment is becoming more popular
Near Field Communication (NFC) is a relatively new technology that means any electronic item can be used as a payment method. Tap-and-go credit cards are becoming more popular, but the most popular new area of NFC tech is the adoption of mobile wallets, such as Google Pay and Apple Pay, which hold all your financial information, and can be used in conjunction with NFC-enabled terminals to pay for anything from a cup of coffee to car rentals. But this has all produced a paradox surrounding the technology that allows this ease of payment.
Contactless payments are growing increasingly popular
Just a few years ago, we transitioned from cash-based systems to extensively cashless infrastructures. The kings of this era – one that has almost reached a turning point – would be the credit card and the debit card. Today, we are experiencing yet another revolution. Those cashless infrastructures that have now become part of our everyday lives are gradually becoming wireless and contactless. And this time around, cards are not the only medium of payment. CONtactless forms of payment would include key fobs, smart cards, or other devices such as smartphones. Through the use of radio-frequency identification – also referred to as RFI – or near feel communicate – commonly shortened to NFC – platforms like Samsung Pay, Apple Pay, Android Pay, and Fitbit Pay allow an increasing customer base to recourse to secure transactions. With both financial institutions and tech giants aggressively pushing contactless technologies forward, it is expected that the latter will soon evolve into the new standard when it comes to cashless payments.
Several myths exist around the security of contactless cards
Just as a wave of doubt and skepticism took hold of credit and debit cards’ initial implementation, the current transition to contactless technologies has inspired fears and concerns. In the wake of smart cards and their growing presence, several maths about contactless means of payment have spawned. However, most of those would be deeply unfounded. They would only be the products of extrapolations and assumptions. In fact, after a careful analysis, one can easily come to the conclusion that contactless cards are particularly secure, as they comprise multiple layers of security that allow for safe transactions.
Scanning a contactless card to steal its data would actually be very difficult
Near field communication technologies, or NFC, are based on Radio Frequency Identification, or RFID. The latter is often implemented in barcodes, in DVD’s, or in the tollbooth tags that let people pass through without stopping to pay a cash toll. Therefore, one can easily guess that the range of radio-waves extends over several meters. Because of this, many assume that the information stored on Europay MasterCard Visa smart cards can be intercepted from afar. However, this would be incorrect. NFC, which is used for smart cards, would be based on radio-waves, but would only allow transactions to happen within a range of 4 cm only. Therefore, hackers cannot fish for private information from meters away.
Another myth would be the smart cards emit radio-waves, therefore constantly streaming data around them. This would actually be preposterous. Smart Cards comprise no battery, and therefore cannot transmit data and information pertaining to one’s bank details on their own. To be activated, a contactless credit or debit card has to be around a registered Point-Of-Sales system.
Close range or long distance skimming triggers unfounded fear
For a contingent of those who are aware that contactless credit and debit cards can only operate within a short range, theft of data is still a concern. For instance, some have come up with scenarios whereby hackers could easily obtain NFC readers and steal people’s banking details while they queue in line in front of a checkout and pay for their goods and services. While this extrapolation sounds a bit more realistic in the context of contactless technology, it is as erroneous as the previous concern. First of all, smart cards can only be read by authorized Point-Of-Sales systems distributed by a bank or a financial institution. Secondly, even if somebody managed to put their hands on a point-of-sales terminal illegally, the stolen device would immediately be reported as missing by its legitimate owner. The said terminal would then be blocked by the issuing bank. Therefore, whoever is in possession of a point-of-sales unit after it has been blocked would be unable to put it to any use.
The idea that stolen smart cards would entail larger losses is preposterous
When the theft of a regular credit or debit card is reported, its owner will not be liable for the fraudulent transactions that the thief conducts. When it comes to contactless cards, it is commonly believed that one can make transactions without limits, and that, without ever having to input a Personal Identification Number (PIN). However, this is far from being the case. Infant, the card’s contactless ability has to be reset after every few transactions. To do so, a user will have to input his PIN. Therefore, losses incurred by the eventuality of a stolen smart card would not actually be significantly larger than the amounts that would have been void through another type of debit or credit card.
The myth duplication of contactless cards is inaccurate
When it comes to contactless cards, a common fear is card cloning. The phenomenon would happen when data from a user’s card is intercepted during a transaction and used to create a bogus, fraudulent copy. In the UK alone, duplication of cards has caused losses amounting up to a whopping $ 200 million. Because of the threat that this malicious phenomenon poses, many have come to fear that the security of contactless cards would be easier to bypass than that of traditional cards. However, this would inaccurate.
To copy the information from a victim’s card, a hacker only has to discretely swipe the card in question through a pocket-size scanning device – a process that only takes a few seconds. And while magnetic stripe cards are highly at risk of being affected by duplication, contactless cards, on the other hand, would actually be safe from fraud in that context. In fact, this new generation of cards is known to generate one-time codes for each and every transaction. As such, a hacker cannot possibly use the information he or she obtained through a quick scan as each code generated becomes obsolete as soon as a transaction is processed.
An additional layer of security that contactless cards have against duplication is that sensitive information – like bank details – is not stored on the embedded chips. This makes the said type of cards even more difficult of access for hackers.
Contactless cards have several advantages
Being secure is just one of the many advantages that contactless cards comprise. Due to its novelty, there is a lot that this method of payment brings to the table. Both retailers and customers would actually reap the benefits of contactless technology through the frequent use of their respective infrastructures and devices.
Contactless cards are convenient and fast
Picture yourself in a crowded grocery as you wrap up your shopping for the week. As you approach the checkout, long queues of customers all holding on to cash and magnetic stripe cards draw in sight. You probably think, in that moment, how lengthy the process of paying for your goods will take. With the use of contactless cards, however, the same scenario would be much faster. On average, cash, magnetic stripe cards, and contactless cards take 15, 25, and 34 seconds respectively during transactions. If you add up the time saved by each customer using a contactless card, you will notice that the hassle of waiting at checkouts can be considerably alleviated.
Contactless cards are easier to use
One of the reasons to use this novel method of payment is that it reduces hassle at checkouts. For example, you do not have to take the card out of your wallet to pay. You could just bring the later close to the cashier’s RFID reader. Furthermore, since major financial service providers such as American Express, Visa, and Mastercard have agreed to waive pin verification for transactions under $ 25. Therefore, regular transactions are made even faster and more practical by contactless technologies.
Contactless technologies should be promoted and not feared
Contactless cards bring forward a new way of consuming and retailing altogether. Bashing its many security and practicality benefits based on assumptions only. If anything, we should be learning about these new technologies and start to accept them into our daily routines as they facilitate and simplify the way we trade.
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