Contactless Payments: Everything You Need to Know


Contactless payment is not a novel idea. It has been around for many years, but the technology was at its infancy, so banking systems had to resort to different alternatives. Examples of these are checks and credit cards, which are not exactly “contactless.”

Today, let us take a look at how far technology has gone and visit the real contactless payment systems that we do via our phone and online banking systems. We will discuss the different types and levels of security that you can expect from them, plus the devices that you can use.

What is a contactless payment?

The truth is that contactless payment refers to anything that allows you to pay without cash. So, credit cards are the primitive forms of contactless payment.

The early adopter of the contactless payment was Mobil. They provided a service called Speedpass in their gas stations, and it was first offered in 1997.  The Speedpass used what is called RFID or radio frequency identification. They issued this technology in keychains. Members had to sign up for an account and then fill that account with money. Whenever they stopped for gas, they simply had to present that keychain, and the system would deduct money from their account.

Over time, the concept was acquired by several companies. Today, the most common form of contactless payment we know is the QR CODE.

Types of contactless payments

There are different types of contactless payments you can use. If you want, you can use several of them, as not all merchants accept all kinds.

  • Online payment processor– this is the most common kind where you sign up for an account, add your funding source and use the payment processing system to transfer money from your account to someone else’s. Great examples of this are PayPal, Skrill, Neteller and other online payment processors.
  • Near-Field Communication– commonly referred to as NFC, this is short-range connectivity that is done wirelessly. In this type of payment, two devices communicate with one another. The first device is your phone or card, and the second is the receiver, which is the device of the merchant. You cannot use NFC unless your device has it, and also if your service provider does not offer it. In NFC, you simply tap your phone to the merchant’s device, and the payment is made.
  • RFID– this type is usually used in cards. The card has a microchip where an account is assigned. You tap that card into a device, and the system deducts the money from your account. RFID systems are typically used in a single “environment.”

For RFID, you can only use your RFID-enabled card or device with the same company. For example, if you keep on paying toll gate fees, you can buy an RFID card and fill that card with money online. Every time you pass through the toll gate, you do not have to pay in cash—just tap the card, and you will get a pass.

Devices used in contactless payments

There are several devices used for contactless payments, but the most common are cards, computers and mobile devices.

  • Cards– most of these are either debit or credit cards, but some companies like toll gates and gas stations also use cards to make their RFID systems work.
  • Mobile devices– both payment processing systems and NFC-enabled payment systems use phones. The phone is important for the system to work, as phones have the capacity to install an app that will identify the user.
  • Laptops– these devices are limited to a payment processor like PayPal. You cannot use NFC and RFID on computers. It is best for payments that do not require your physical presence. You can also use it to deposit on sites like VulkanVegas casino.

These are the three most common devices used for contactless payments. Some companies may come up with novel ideas, such as the Speedpass, which was issued in the form of a keychain.

Security of contactless payments

Contactless payment is secure, and this is why it is used by many financial institutions. Even casinos that offer casino bonuses prefer contactless payments. Today, all banking institutions use at least a 258-bit security system plus firewalls.

Phones are also advanced now—you have the option to use not just a password but also face recognition and fingerprint.

Most people who get hacked are those that click on many things from their emails. They supply their personal information to unknown people, and they end up getting victimized. The basic rule of thumb is that you should never ever share your password with anybody. Security is a concern if your phone is not protected by a password. You also need to make sure that your phone automatically locks. If someone found your phone ad it does not lock, they will be able to use your payment apps.

There will come a time when we may not need phones and laptops to facilitate contactless payments. Today, there is an influx of smart devices, such as watches and speakers, that can connect to a system—think of Alexa and Google Home. Who knows, maybe it is also possible to have a powerful microchip that can be embedded on rings.

Contactless payments are safe, secure and reliable. The digital networks of banks and other payment systems have become sophisticated. The only thing that you have to be concerned about is your password—never ever share it with anyone, or your data will be compromised.


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