Awareness of contactless credit and debit cards

It is an innovative step for withdrawing money.

In revolutionary technical world, where people are highly reliant on internet technology, contactless credit cards are good options. Around the world, users are availing such magnificent facility but in India, this trend is still in the embryonic stage and currently very few banks are offering contactless credit cards. State Bank of India and ICICI Bank have launched contactless cards in the country, which will help make transactions faster. The banks are aiming to leverage Reserve Bank of India (RBI)’s guidelines which allow them to process contactless transactions below Rs 2,000 without a PIN.

Concept of contactless cards:

As the name designates, a contactless smart card is a contactless 13.56 MHz credential whose dimensions are credit-card size. Its entrenched integrated circuits can store and sometimes process data and communicate with a terminal via radio waves. There are two broad categories of contactless smart cards. Memory cards contain non-volatile memory storage components, and perhaps some specific security logic. Contactless smart cards do contain read-only RFID called CSN (Card Serial Number) or UID, and a re-writeable smart card microchip that can be transcribed via radio waves.

The cards do not require direct contact between the card and the terminal dissimilar that is required in regular cards. They need to be just tapped and waved near the requisite terminal. In order to process the payment, such cards use radio frequency identification (RFID) or near field communication (NFC) technology. Radio transmission is used to establish contact when the card is waved or tapped near a terminal that is furnished to receive these signals. Thus, if the card is waved near a terminal which is not enabled to read these card then the card will not operate as a contactless card.

A chip and a radio frequency antenna are implanted in the card. This allows the terminal to get the particulars without coming in direct contact with the card. The account information of the accountholder is communicated through the secure network of the card issuing brand.

 Beginning from 2005, a major application of the technology has been contactless payment credit and debit cards. Some examples include:

·        ExpressPay – American Express

·        PayPass – MasterCard

·        Zip – Discover

·        payWave – Visa

In general, there are two classes of contactless bank cards:

1. Magnetic stripe data (MSD): Contactless MSD cards are similar to magnetic stripe cards in terms of the data they share across the contactless interface. They are only distributed in the U.S.

2. Contactless EMV: Contactless EMV cards have two interfaces (contact and contactless) and work as a normal EMV card via their contact interface. The contactless interface provides similar data to a contact EMV transaction, but usually a subset of the capabilities (e.g. usually issuers will not allow balances to be increased via the contactless interface, instead requiring the card to be inserted into a device which uses the contact interface).

User may have numerous queries regarding such new technology credit card. They often ask that how they come to know whether their credit card is a contact less card or not.

Users can look for this sign: 

This sign indicates that the card and the point where it is to be swiped are equipped with the technology to process the card without direct contact. This sign is required on the card and the terminal as well.

Other useful information about contactless cards is as under:

- These cards work within a range of 4 cm of the terminal where the payment is to be processed. The functioning is subject to the contact not being blocked by a metallic object.

- Customers can use contactless credit cards as normal cards also and swiped at terminals if required. For cash withdrawals, the card has to inserted or dipped in the machine.

- As per the information available, transactions of only Rs 2,000 or below are allowed on contactless credit cards. For transactions more than that amount, the card will have to be swiped like a normal card and the pin needs to be entered.

- It has also feature of getting alerts and a transaction slip as in the case of normal cards.

- Credit card issuing company may fix the number or frequency of transactions per day/per month allowed as per their policy.

Benefits of contactless cards:

Presently, there is withdrawal limit of Rs 2,000 in Indian banks.

Contactless cards are safer than other cards in many ways. Since the card does not leave the hands of the holder, there is no danger of forgetting the card, somebody duplicating it or losing it.

The transaction processing is also faster due to the fact that swiping is not required and also no PIN entering is required for amounts under Rs 2,000.

- For big transactions, they can be used just as a normal card.

- People may be anxious that if they are near a contactless terminal, a transaction may be processed without them actually knowing. This does not happen as the card has to be waved and tapped and an amount has to be entered for it to be processed.

Another advantage of using contactless credit card is that there is no danger of a twin transaction as when one transaction is processed, customers get an alert and a light or beep indicates that the transaction has been successful.

Contactless cards increase the ease and convenience of transactions. Moreover, the speed at which the transaction can be carried out is almost double that of traditional cards.

To windup, it is said that contactless payments are those that transfer data between a point-of-sale device (equipped with a contactless reader) and a contactless enabled payment instrument (credit card, key fob, and smart phone). Contactless payments can be done using credit cards and debit cards, key fobs, smart cards or other devices that use RFID or NFC wireless technology for making secure POS payments.