Mobile Contactless Cards & Payment Technology – How It Works, Pros & Cons

by Nikunj Gundaniya, Guest Contributor

With the advancement of technology, almost everything has been changed. Whether it is about travelling or education, every scope is technology-based. The same concept is applied to the payment mode. Carry-out cash in the pocket is like a past scenario because everyone loves to use a digital wallet solution. The reason for this is based on the security, efficiency and quick transaction which contactless cards are offering.

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What is the mobile contactless system?
Mobile contactless systems are debit card or the credit cards or any other card which uses RFID (Radio Frequency Identification) or NFC (Near Field Communication) to make the payment. 

Working on payment technology?
The mobile money payment solution is working on the security based concept that stores the information of credit card and debit card. This allows smartphone holders to make the transaction just by tapping the respective smartphone. The information is encrypted for the purpose of security.

Let us understand the working of contactless payment through an example. You have your mobile device which allows you to make the payment. For this, you put all the information of your credit or debit card into it. Now you reach to the store which has the facility of mobile payment solution. You just take out your device and hold it away from the point of the scale. The embedded chip will automatically read the store information and then proceed with the transaction. The POS terminals will emit out the high-frequency radio wave which will make the communication between phone and readers.

The card reader initiates the connection which is NFC enabled. The card responds to the connection by tapping into the short electromagnetic wave of the radio frequency region. 

The wireless communication protocol links the phone and terminals when the mobile device will be in range. This will carry out a secure transaction. On the other hand, it is twice fast as compare to the traditional method of payment where there is an involvement of cash.

Influence of Mobile Contactless card on the banks and business
Due to the fast approach of the contactless based transaction, the banking process has been converted to a smart and digitized concept. Now almost every bank has its own app that enables their customer to experience the smooth transaction of money. Ultimately this builds out a strong customer relationship. A customer could download the app and make the transaction around the globe. 

The same applies to the business. Most of the big vendors offer their customer to make the payment using the contactless system. This provides a secure transaction and cuts out the chance of long process traditional cash-based process. Using this approach, the user could save time and make the transaction within the comfort zone. 

General merits and demerits of mobile contactless system:

Pros
There are many advantages to using mobile contactless cards:

• The first merit of this type of strategy is about the secure mode of payment that takes place while making the transaction. It doesn’t require your card to come in contact with any other device.
• Virtual card provisioning, remote deactivation and user-configured pin protection are some of the features which you could see in peer to peer payment app.
• There is no chance of typo errors while entering the PIN.
• The contactless cards are quick and time-saving. It reduces the waiting time in the long queue at the cash counter.
• Many banks offer cashback and rewards to the person who is following the cashless payment system.

Cons:
While on the other hand, this kind of payment system also holds cons which are as follow:

• This kind of approach could create confusion in case if the customer is unaware of how to use a digital wallet solution.
• There could be a chance of malware or the spyware attack. No doubt the payment method is secure and encrypted but hackers are following new techniques to steal confidential information.
• Every bank has some limit on the limit per transaction with a contactless payment card and this could not be changed by the user.
• It is not necessary that all stores support and provide the facility of contactless payment. So the user could not go 100% wallet free to the market.
• Those customers who have digital payment apps could use this kind of technology.

Verdict:
Mobile contactless cards could be the best approach when you are conscious about your security and time-saving. Software developers are in continues progress to make the eWallet app development more user-friendly and advance. But on the other hand, people must learn and become aware of these technologies to avoid any kind of fraud and misuse. Just step forward to the digital world and you will experience the change in your way. Thanks to reading.

About the author:

Nikunj Gundaniya, Product manager Digipay.guru, one of the leading eWallet App Development, which provides mobile finance application development services. He is a visionary leader whose flamboyant management style has given profitable results for the company. He believes in the mantra of giving 100% to his work.

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