The contactless card was first introduced in 2003 by MasterCard. These instant payment tools are integrated NFC technology, allowing a user to complete a transaction without physically swiping the card in a PoS terminal.
How do these credit cards work? Contactless credit cards work by wirelessly communicating between the reader and the card itself. Its NFC chip carries the necessary information to complete a transaction; when a request is made, the data is passed through an encrypted channel, and the transaction sum is deducted from the cardholder’s account. Benefits of contactless credit cards Contactless credit cards offer a more convenient mode of payment, along with several layers of security to protect the customer against unwanted transactions and data theft. These cards can only be used at close proximity, eliminating chances of unwanted read-outs. Moreover, the contactless transaction amount is capped at a maximum of Rs.2,000, and customers making a larger transaction will have to enter their PIN to process the payment. Each transaction carries a unique ID as well, which offers a provision to track the details while eliminating chances of repeat payments. These systems complement already existing credit card security features, like zero-fraud liability cover offered with credit cards like the Bajaj Finserv RBL Bank SuperCard. Despite being a somewhat new addition to India’s financial market, contactless cards have gained massive popularity because of the benefits these have to offer. Visa estimates almost 20 million contactless credit cards in India, with more than 3.3 million merchants accepting contactless payment across the nation.
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AuthorAman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management. |