Learn what a contactless credit card is and its benefits

Over time, contactless credit cards have become quite popular. In this post, you will know what is Contactless Credit Card, how it works, and its benefits.

What is Contactless Payment?

If you want to know what a contactless credit card is, you need to understand the subject of contactless payment first. Contactless payment is a touchless payment system using a credit or debit card. Contactless payments are processed using Radio Frequency Identification (RFID) and Near-Field Communication (NFC).

An alternative way to insert or swipe a card at a card terminal is through contactless payments. It is a very fast payment method and works quite easily. It is also very useful for user privacy.

What is a Contactless Credit Card?

Contactless credit cards basically make payments by card quite easily using contactless payment technologies. This card performs transactions by transferring credit card information to a point-of-sale system via short-range electromagnetic waves.

Most credit cards have a built-in chip, but in order for this chip to work, it needs to be inserted into a specific device. No need to insert a card for payment in case of a contactless credit card. Payment can be made only once on the POS machine through these cards.

How does a contactless credit card work?

Contactless credit cards contain a small embedded chip that emits electromagnetic waves. Payment information is transferred when the card is inserted within a few inches of the Contactless Supported Payment Terminal.

This method can take one or two seconds to complete a transaction using a credit card. So if you take the card too fast, there may be a problem in the transaction. You can tell if the payment has been completed by the beep sound of the payment terminal, green checkmark, or green light.

Ways to Recognize Contactless Credit Cards

The credit card has a contactless indicator symbol on the front or back. This contactless symbol looks a lot like a WiFi symbol. The same symbol will also appear on the screen of the point-of-sale or card terminal, indicating the point of contactless card support. No PIN code or OTP is required if the payment amount is within a certain limit. For example, in the case of the contactless card in Bangladesh, no PIN or OTP of up to 3000 takas will be required.

A one-time code or OTP is created on the transaction of a contactless card chip, similar to a credit card chip when transacting outside a certain limit. Payment is to be confirmed through this code. Or, you need to enter your card’s PIN POS machine to confirm the transaction.

This means that even if your contactless card is lost or stolen, it will be possible to make a payment of a certain amount without an OTP code. So you need to be careful about the benefits of this card.

Advantages of contactless credit cards

Speed

It is a long process to complete the payment by swiping to the ordinary credit card terminal. But a contactless credit card will change that completely. Payment can only be made by holding on to the reader instead of inserting the card through a contactless credit card.

Without contact

The Covid-19 pandemic has become a thing of the past. Contacts are required for payments at terminals used on ordinary credit cards. Contactless credit cards, on the other hand, do not have this problem, which makes them much more secure.

Chip durability

Magnetic stripe and EMV chips become an obsolete time and cause problems over time. However, in the case of contactless chips, there is no such problem. Contactless credit card chips remain intact for a long time and can be used.

International Payment

The popularity of contactless credit cards has increased in many parts of the world, especially in Europe and Australia. As a result, multiple vendors around the world can be paid with the same card through contactless credit cards.

Is it Secure?

Contactless credit cards are now one of the most secure of all payment methods. It does not require a PIN code to pay a certain amount. As a result, no one will be able to see your card PIN. Again, if your card is lost, the one who gets it will be able to easily pay 3000 takas with that card. So it is convenient and risky at the same time.

After the payment by credit card, the customer will receive an SMS stating that the transaction has been made on his card. The card issuing bank will be able to set the limit of daily contactless payments.

Payment by contactless credit card does not require any physical contact. As a result, it is possible to be safe from some of the current health problems. Simply put, a contactless credit card is more secure than a traditional credit card.

A contactless credit card in Bangladesh

Contactless credit cards are also in vogue in our country. Many banks are now offering contactless credit cards. As of 2021, there are already 4.5 lakh contactless credit cards in Bangladesh. This number is growing at an annual rate of 70%. These cards can be used at about 42,000 point-of-sale terminals across the country.

Many banks in Bangladesh now offer contactless credit cards, such as EBL, Mutual Trust Bank Limited, Standard Chartered Bank, BRAC Bank, Dhaka Bank, etc.

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