Contactless payments refer to a more secure transaction method for consumers than the traditional swiping of a card. It leverages the Radio Frequency Identification (RFID) technology and Near-field Communication (NFC) to carry out the transactions. It is an ideal example of how technology is poised to make transactions much quicker and easier.
As the name suggests, the transactions made using this payment method are contactless, without physically touching a PIN terminal. It works by tapping the payment card or other device such as a smartphone near a point-of-sale terminal equipped with contactless payment technology.
Contactless payments are considered a secure payment method as the customers do not have to share their billing or payment information directly with the vendor. In fact, all communication is encrypted, and each transaction is tokenized with a one-time transaction number.
Catering to the rise in the demand for contactless payments, the number of merchants adopting contactless payments has grown five times in the last five years.