EMV contactless payments

Contactless payments allow both merchants and cardholders to save time, providing a handy payment tool. Contactless payments are often referred to as near-field contact or NFC payments, as they are based on the NFC technology which works as follows. Once a card gets into the magnetic field of the terminal, card data is read by the terminal; contactless payment cards do not have to be inserted into a payment terminal or swiped.

EMV contactless payment cards have higher security level than magnetic stripe contactless payments. In case of EMV contactless cards, data is not only scanned by the terminal (as in the case of magnetic stripe contactless payment cards), but an exchange of information takes place between the terminal and the card.

Security-related and technology-related issues impose some limitations upon EMV contactless payments. A contactless payment card chip contains several applications, suitable for different transaction types. In case of contact payments the appropriate application can be selected by a cardholder, but during contactless payments, the choice is made automatically. Another limitation is the limited transaction amounts (for security reasons).

The key advantage of EMV contactless payments is that they simplify certification process considerable. Some companies may choose to abandon contact payments completely in favor of transition to contactless payments (as terminals designed for acceptance of contactless payment cards only are cheaper than terminals accepting both contact and contactless payments).

Read more about processing of contactless cards and payments in the respective article on Paylosophy.com.