Advantages & Disadvantages of Contactless Credit Cards

In today’s world, everyone wants to pay from their cards rather than using cash. It makes the wallet or purse lighter. During the worldwide pandemic where people refrain from touching each other let alone touching things in stores, people are more using contactless payment methods rather than using cash or using their contactless credit cards. The technological advancement has led many banks and tech-companies to tap & pay or use QR-Codes to pay rather using cash. There’s no need to swipe your cards anymore. You can wave your card at the machine or payment device and enter your pin to approve the transaction.

In the year 2014, Apple introduced Apple-Pay. Samsung introduced its app named the Samsung-Pay in August 2015. The Android market also joined the scene by introducing the Android-Pay in the year 2015 roughly 18 months later which is now popularly known as Google Pay as the named was changed in January 2018. Many retailers also introduced their payments applications for the convenience of the customers.

Contactless payment is more popular now, especially with the younger generation. Most people use their smartphones to pay and in return, they get a lot of benefits. Nowadays, many app developers have come up with their online payment applications and they have become popular as they give you good cashback & vouchers benefits when you use their app.

While many people love the contactless payment, many still fear the concept of the contactless payment system. They like the tried & tested method of making payments by using cash.

Today, we will discuss the main advantages & disadvantages of contactless credit cards for payments. But before that, we need to know how the system actually works.

How Does Contactless Payment Work?

Payment applications run on devices that are equipped with an NFC chip which is known as Near-Field-Identification technology. The device that supports this technology can enable users to send and receive sensitive information using radio-waves over a nominal range. RFID or better known as Radio-Frequency-Identification technology is an upgrade to it.

To safeguard your information from hackers and online-thieves, the transactions take place in encrypted codes which make it immune to the hackers. This means the hackers or no one can check your credit or bank information. Companies like Apple, Google & Samsung do not store or save any sensitive information of their customers. Now that we know how this system works, let us check the advantages & disadvantages of the payment system.

Advantages of Contactless Payment System

1. Making payment through your contactless credit card or smartphone rather than using cash. You don’t need to have your wallet bulked up. No need to press those keys to approve your transaction or signing any receipt.
2. The payments are secure as it takes between 2 devices. The customer does not have to worry about any issues of fraud. The contactless payment doesn’t need you to make your credit card touch with the transaction machine or device.
3. The NFC technology uses secure data-encryption technology during all transactions or transfer of sensitive information. This helps in the reduction of any threat from hackers who can steal your information and use it otherwise.
4. There is a black strip also known as the magnetic-strip on the back of every contactless credit card. It is not required for the contactless payment system.
5. The time and cost are not wasted for the customer if he is in a hurry. Just tapping is a much more convenient way than other paying options.
6. No need to enter any PINs. The contactless payment method is secure, quick and accurate.
7. The customers can also track the points & rewards system when you purchase anything. Some banks also offer you cashback offers and vouchers when you use their platform.

Now the Disadvantages for Customers

1. There are still a large number of merchants or shop-owners which do not know how to use this tech. Not everyone is educated enough to use this system. It may be confusing or frustrating for them.
2. Customers who have installed the electronic payment application on their device can use this system.
3. If you lose your contactless credit card, it can be dangerous as any thief can use this technology. As you don’t need to enter a PIN or sign a receipt, purchasing or using your contactless credit card makes it much easier for the fraudster until you block your contactless credit card.
4. You cannot choose or limit the number of transactions you do with your credit card chosen by your respective bank. You can also not choose the amount that you transact as any respective bank does not allow more AED 500 to be transacted via a contactless credit card.
5. As hackers also upgrade themselves with latest in tech and hacking software, there is always a slight risk of a spyware or malware attack on your electronic device. Just as the banks and cybersecurity organizations invent ways to secure your information, hackers also are becoming smarter day by day.

Bottom-line or Conclusion

The more people educate themselves, the more it will be easy to make a contactless payment system a reality for everyone. Customers should also be aware that companies do not store their sensitive information and also securely do the transactions. This system also helps in growing a business as this leads to better customer satisfaction and experience. Less time consuming when paying always makes a customer happy. If you don’t have an electronic payment device or a contactless credit card, it is the right time to get one. Embrace the evolution of technology and reap the rewards of using this system. The world is evolving in the digital revolution, when are you going to evolve?