ETA Brief: A Guide to Contactless Payments
In light of the COVID-19 public health emergency, ETA is creating materials to help consumers, merchants and payment professionals understand the ways the payments technology industry stands ready to assist.
Contactless payments offer consumers a way to “tap” to pay for their goods at the point-of-sale, allowing them to potentially avoid contact with surfaces that could be contaminated with COVID-19.
The payments industry has been powering secure contactless payments in the U.S. and across the world for years, but the technology is still new to many consumers. This guide from the Electronic Transactions Association (ETA), the global industry group for the payments technology industry, helps you identify and use secure contactless payments.
What exactly are contactless payments?
Contactless payments refer to digital payments that use technology to securely communicate your payment information to the merchant without any physical contact, unlike handing over cash or credit card. It’s easy, secure and nearly instant.
A consumer can use a variety of different types of devices to make these payments: a smartphone, smartwatch or other wearable technology, or a contactless-enabled credit or debit card. Whether they are using a smart device or a card, they simply “tap” to pay by holding their contactless-enabled device over the payment terminal.
In an instant, the transaction is securely processed and completed without the device ever changing hands or making contact with any surface or other person.
How do they work?
Contactless payments use a signal to transmit payment data to a payment terminal. The technology that facilitates this transmission is called Near-Field Communication, or NFC. Contactless devices are smartphones, wearable smart devices like smart watches and rings, and contactless cards. These devices have NFC antennas in them that transmit payment data directly to the terminal when the device is placed near one with an NFC receiver.
Are they secure?
Yes! Contactless payments are one of the most secure ways to pay.
All contactless payments are powered by the same technology that powers EMV “chip” cards. This means that contactless payments are nearly impossible for fraudsters to counterfeit. In fact, EMV technology decreased counterfeit card fraud by 87 percent, and overall in-person card fraud by 40 percent.
But contactless payments go beyond being just about impossible to copy. They utilize an advanced technology called tokenization to secure each and every transaction. Tokenization protects consumer data from breach and exploitation by replacing sensitive payment data, like your 16-digit card number, with a unique digital identifier called a token. These tokens are only valid for that single transaction and don’t actually transmit any sensitive data. That means that even if a bad actor somehow accessed your tokenized data, they would be unable to use it to identify you or your card number, and therefore they could not use it to commit fraud.
What’s more, contactless payments made via a smartphone have additional security. Smartphones use multi-layered and biometric authentication, meaning that they require a unique biometric identifier, like a fingerprint or face scan, or a PIN in order to be approved. That means no one but you can use your smartphone to make a contactless payment, making them extremely secure.
On your smartphone, card information is stored in a “secure element,” a highly-secure, industry-standard, certified chip designed to safely store payment information.
And whether you’re using a contactless payment type or not, consumers are never liable if they are made victims of payments fraud. So you can rest assured that while using any digital payment type, you are protected.
How can consumers use them?
First, determine if your card or smart device is contactless-enabled. Contactless-enabled cards are issued by banks and supported by the four major card brands in the United States: Visa, Mastercard, American Express and Discover. There are millions of contactless-enabled cards, so chances are that your bank or credit union is currently issuing them. In fact, you might already have one, especially if you’ve recently opened a new account or received a replacement card. The easiest way to tell if you have contactless-enabled card is to look for this symbol on the front or back of your card: .
This is the universal contactless payments logo. If your card has this logo, then it is ready to be used at any merchant that accepts contactless payments.
Don’t have one? Call your bank or visit a branch to request one. If they offer contactless cards, they will issue you a new card with the capability.
Virtually every modern smartphone – including all new iPhones and most Android devices – can also make contactless payments. Smartphones use applications called mobile wallets to securely store and transmit your payment data. The most popular mobile wallets include Apple Pay and Google Pay and come pre-installed on new devices from those manufacturers. Consumers can opt-in to using these services easily and quickly.
Guides from smartphone manufacturers that demonstrate how to set-up mobile payments on their devices can be found here:
Once your contactless card or mobile device is set up, making a payment is quick and easy. When you’re ready to check out, simply hold the device for 2-3 seconds above a payment terminal that accepts contactless payments to make your payment. You will hear a beep and see on the terminal that their payment has been securely processed. It’s that simple!
How can you tell if a merchant accepts contactless payments?
Millions of merchants accept contactless payments. In fact, according to data from 2019, over 60 percent of face-to-face transactions on Visa’s network – the largest in the world – happened at a contactless-enabled terminal. And according to 2019 Visa data, 80 of the top 100 merchants by transactions in the U.S. currently accept contactless payments.
When at a merchant, look for this symbol on their payment terminal: .
Sometimes this logo is on a sticker in the storefront near checkout; other times it’s attached to piece of hardware like a card reader. If that sticker is present, then the merchant accepts contactless payments via card and smart device.
Further, look for the logos of the mobile wallet brands. If a merchant accepts mobile wallets like Apple Pay, Google Pay and Samsung Pay, they also can accept contactless cards.
Many terminals will also indicate on their on-screen prompts if they can process contactless payments. Look for the word “tap” on the terminal screen – this means that contactless payments are accepted.
Finally, when in doubt, ask! Merchants are excited about contactless payments because they are quick, secure and convenient. They will be happy to tell you how to pay with contactless devices if they accept them.
I am a merchant and I don’t currently accept contactless payments. How can I accept them?
Get in contact with your payments technology company. If you accept EMV chip cards, you can accept contactless payments in most cases. Your payments processor, bank or sales agent will be able to answer your questions, supply you with data, help you activate contactless technology and market it to your customers.
Conclusion
Contactless payments offer myriad benefits, including security and convenience, for consumers and for merchants. They offer a payment option that can help consumers prevent contact with potentially contaminated surfaces – something that is top of mind as the world fights to contain the COVID-19 virus.
That said, no matter how you choose to pay, experts say the best way to avoid infection is to frequently wash your hands and avoid touching your face. Click here to read more best practices from the Centers for Disease Control and Prevention.