Contactless Payment Technology Explained

techTalk2By Shaden McCann

In today’s ever-changing technological world, new technologies pop up and become commonplace in our lives all the time. Not too long ago, developments in smartphones and devices introduced us to the concept of “contactless payment.” Applications such as Apple Pay and Google Wallet established the idea of virtual wallets. Now many banks and credit-card companies offer another option with “tap-and-go” credit and debit cards. Have you noticed what looks like a WiFi symbol somewhere on your card? Congratulations, you have a contactless-payment tap-and-go card.

So, how does this technology work? Contactless-payment technology works by way of using near-field communication (NFC). When two such compatible devices, such as a point of sale terminal enabled with NFC and a smartphone with a virtual wallet, are brought within a few centimeters of each other, a short two-way communication is initiated and information is transmitted over a very specific radio frequency.

The needed information is exchanged between the devices, and then communication is terminated. Devices that use virtual wallets, like the aforementioned Apple Pay, create a token that replaces actual credit-card information with an encrypted Device Account Number. The token is what is used to process the sale, so your card details themselves are never transmitted.

The convenience of this new payment method has seen it increase in use over the past several years. With the proximity between the devices and the low amount of power needed to function, the device itself can be as small as the chip in your debit card. While many may be concerned about the security of their information with technology like this, the fact that someone or something would have to be in extremely close proximity to your card or device is itself a defense against such cyber-attacks. Unlike the bank information stored in the magnetic strip of your card, the information stored in the chip or device is encrypted, and this encryption is constantly changing itself, making the information much harder to steal.

Overall, contactless payment technology is a much more secure and reliable way to make purchases. With the increasing prevalence of wearable technology, this will most likely become the way of the future in how most payment transactions are conducted.

Shaden McCann is a member of the Information Technology Senior Capstone Project course and is planning on a career in Education. For more info, visit www.shadenmccann.com.

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