The Future of Contactless Credit Cards

What used to be considered convenient - swiping or inserting your credit card into a reader - may soon become antiquated. Contactless technology has become increasingly popular over the past decade as more and more consumers crave even speedier, more efficient and contactless ways of making credit card transactions.

Financial institutions across the country are beginning to adopt the concept of “contactless” transactions, allowing consumers to simply “tap” a smart terminal or point-of-sale device to pay using a credit or debit card.

But how exactly do contactless credit and debit cards work? Are they reliable and secure? At Premier Bank of the South, we’ve compiled everything you need to know about the latest trend in payment technology.

 

Contactless payment technology is not technically a new feature, but it is newer to banking. This technology has been heavily used in public transit booths in cities such as Chicago and London since the early 2010s. Since then, contactless transactions have steadily grown in popularity and are just now gaining the buzz it deserves in other technology applications.

 

The cards themselves used a technology called near-field communication, or NFC for short. Each card is equipped with an NFC chip and a radio frequency (RFID) antenna. The card uses these radio frequencies when waved over a transit terminal kiosk or at a cashier’s pad to send a one-time code to complete the transaction.

Contactless cards contain the same key elements as regular debit or credit cards that use a chip or magnetic-swipe technology, so users can choose which transaction method they prefer. Just like traditional cards, contactless cards use a unique number, expiration date and CVV code.

 

Anytime a new technology is introduced, it can be unsettling for consumers. As hackers continue to become increasingly savvy and aggressive, technological advancements to safeguard and protect sensitive data, including financial and personal information –are a top priority.

Contactless cards are an evolution of these protections, proving to be even more secure than the familiar and trusted magnetic-strip cards. While some skeptics are concerned about thieves getting too close to the cards to scanners in an attempt to steal information in crowded places, this isn’t as simple as it sounds and RFID-blocking wallets can help secure your information by wrapping your card in aluminum.

Even with security measures in place, all consumers should regularly monitor their accounts to ensure their information has not been compromised. This goes for any type of credit or debit card that you have. Take the time to review your statements each month and mark off any suspicious-looking activity. If you suspect your card is lost or has been stolen, or you think someone else may have gained access to sensitive information, please contact us immediately at (256) 737-9900 to deactivate your card and get a replacement.

 

The contactless credit card technology can be triggered if you keep your card along with other credit cards in a wallet that you hold to the reader. For this reason, it’s best to pull your card out and scan it rather than hold your wallet up to the reader. Additionally, some merchants may give you the option to pay via swipe or chip if your transaction is declined for any reason. Remember, a contactless card works just the same as any credit or debit card but simply allows for an option for contactless payment should you prefer.

 

As contactless technology becomes mainstream, more and more financial institutions will automatically issue cards with RFID built into them. If you’re interested in trying contactless debit or credit cards out for yourself, contact us at 256-737-9900 or visit one of our North Alabama locations and open a checking account.