Contactless payment

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EMV contactless symbol used on compatible payment terminals
A contactless enabled American Express charge card issued in the UK

Contactless payment systems are credit cards and debit cards, key fobs, smartcards or other devices that use radio-frequency identification for making secure payments. The embedded chip and antenna enable consumers to wave their card or fob over a reader at the point of sale. Some suppliers claim that transactions can be almost twice as fast as a conventional cash, credit, or debit card purchase. Because no signature or PIN verification is typically required, contactless purchases are limited to US$25 in the U.S., A$100 in Australia, NZD$80 in New Zealand, €25 in most euro area countries (€15 in Ireland) and £20 in the UK (to be increased to £30 from September 2015).[1] Those unauthorized may still take advantage of contactless payment systems as no identification occurs before payment except for certain devices. However, owners may block transactions which may provide relatively short time frame, if any, for fraudulent activities to occur of any kind.

Research indicates that consumers are likely to spend more money due to the ease of small transactions.[2] MasterCard Canada says it has seen "about 25 percent" higher spending by users of its PayPass-brand RFID credit cards.[3]


Mobil was one of the most notable early adopters of this technology, and offered their "Speedpass" contactless payment system for participating Mobil gas stations as early as 1997. Although Mobil has since merged with Exxon, the service is still offered at many of ExxonMobil's stations. Freedompay also had early wins in the contactless space with Bank of America[4] and McDonald's[5]

McDonald's, Boots, EAT., Heron Foods, Pret a Manger, Stagecoach Group, Subway (restaurant), AMT Coffee and Lidl are among the retailers offering contactless payments to their customers in the UK. In March 2008 EAT. became the first restaurant chain to adopt contactless.[6]

Major financial entities now offering contactless payment systems include MasterCard, Citibank, JPMorgan Chase, American Express, KeyBank, Barclays, Barclaycard, HSBC, Lloyds Banking Group, Freedompay, The Co-operative Bank and The Royal Bank of Scotland Group. Visa payWave, American Express ExpressPay, and MasterCard PayPass are examples of contactless credit cards which have become widespread in U.S. and UK. The UK (and the rest of the world) version of the contactless applications differ from the U.S. one. The UK version has the capability of transacting offline, based on the limit stored in the application.

The first contactless cards in the UK were issued by Barclaycard in 2008. As of May 2013, there are approximately 32.5 million contactless-enabled cards in circulation in the UK and over 147,000 terminals in use.[7]

Telecom operators are starting to get involved in contactless payments via the use of near field communication phones. Belgacom's Pingping - Belgium, for example, has a stored value account and via a partnership with Alcatel-Lucent's touchatag provides contactless payment functionalities. In January 2010, Barclaycard partnered with mobile phone firm Orange, to launch a contactless credit card in the UK. Orange and Barclaycard also announced in 2009 that they will be launching a mobile phone with contactless technology.[8]

In October 2011, the first mobile phones with MasterCard PayPass and/or VISA payWave certification appeared. A PayPass or payWave account can be assigned to the embedded Secure Element and/or SIM card within the phones. Google Wallet is an application for devices running Google's Android OS, which allows users to make purchases using NFC, which initially required a physical secure element but this was replaced by host card emulation which was introduced in Android 4.4 (KitKat). Softcard (formerly known as Isis mobile wallet), Cityzi and Quick Tap wallets for example, use a secure SIM card to store encrypted personal information. Contactless payments with enabled mobile phones still occur on a small scale, but every month an increasing number of mobile phones are certified.[9]

In February 2014, MasterCard announced that it would partner with Weve, which is a joint venture between EE, Telefónica UK, and Vodafone UK, to focus on mobile payments. The partnership will promote the development of "contactless mobile payment systems" by creating a universal platform in Europe for it.[10]


As with all payment devices, contactless cards have a number of security features. Contactless runs over the same chip and PIN network as normal credit and debit card transactions, there is a payment limit on single transactions and some contactless cards can only be used a certain number of times before customers are asked for their PIN.[11] Contactless debit and credit transactions are protected by the same fraud guarantee as standard transactions. In order to check that a contactless card has been delivered to the authorised card holder, the contactless part of the card will not function until a standard chip and PIN transaction has been executed.

Under fraud guarantee standards U.S. banks claim to be liable for any fraudulent transactions charged to the contactless cards. However, banks are not liable for the identity theft that the RFID card can encourage.

See also[edit]


  1. ^ Milligan, Brian (6 February 2015). "Contactless limit to go up to £30 as card use surges". BBC News. Retrieved 7 February 2015. 
  2. ^ "New MasterCard Advisors Study on Contactless Payments Shows Almost 30% Lift in Total Spend Within First Year of Adoption". 2012-05-03. Retrieved 2013-03-13. 
  3. ^ Dubinsky, Zach. "New credit cards pose security problem". 2010-06-02. Retrieved 2010-06-03.
  4. ^ FreedomPay makes waves in contactless payment | SecureIDNews
  5. ^ "McDonald's testing e-payment system". USA Today. 2001-05-29. 
  6. ^ "First Fully Integrated Contactless Payment System in UK". 2008-03-26. Retrieved 2012-08-26. 
  7. ^[dead link]
  8. ^ "Barclaycard and Orange unveil pay-by-mobile service by Garry White". Daily Telegraph (London). 2009-03-08. Retrieved 2010-08-06. 
  9. ^ "Certified phones". Retrieved 2015-02-07. 
  10. ^ Villarreal, Alexandra. "MasterCard, Weve partner to accelerate contactless payments shift in U.K." Bank Credit News. 2/10/2014. Retrieved 2/10/2014.
  11. ^ Lloyds Bank - UK Bank Accounts - Contactless Debit Cards

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