You probably paid many times while shopping with your credit or debit card. Your payment is secured thanks to the protocols set between your bank (i.e. Banque Casino), the credit card banks association (i.e. Visa / Master Card) and the shop where you buy the products (i.e. Carrefour) and last but not least, the PIN number you need to remember and use to confirm the transaction.
The PIN number of your debit or credit card protects you from any miss-use of the card by someone who by accident or by intention may enter in the possession of your card and would use it unlawfully to make purchases. If the PIN number is generally considered as a barrier to a miss-use of the card, lately, a new type of payment has been emerged in order to facilitate the payments: the contactless payment.
What is the contactless payment?
The contactless payment means the use of the credit or debit card without the PIN number for purchases up to certain amounts. In fact this does not change by any means the payment you regularly do, but only allows you to use the card without being obliged to regularly introduce the PIN number. Such an option is available for your purchases in shops, but not for the on-line payments or to withdraw money from ATMs.
How does it work?
The contactless payment technology was launched for the first time in 2007 and has increasingly become popular across the world. For instance, in France in 2018 more than 2 billions payments were contacless, from only 1.2 millions in 2012 (or 2.000 folds increase). In order for such a transaction to be possible, one needs a terminal in the shop that allows for contactless payments and a card that allows for such payments; this type of cards is marked with a “wireless” symbol. The absence of one of these conditions makes the contactless payment impossible.
The communication between the terminal and the card uses a communication protocol called NFC (Near Field Communication) and allows an exchange of data between the terminal and your card, while replacing the physical interaction between the two. This technology is, in general, sure and safe for use, but it may happen that this exchange sometimes is not possible for several reasons (i.e. distance between the terminal and the card is more than 3-4 cm, compatibility, etc.). Should this be the case, one can still make the payment by using the card in a traditional way, i.e. by inserting the card in the terminal and insert the PIN number.
What are the advantages?
In order to minimize potential miss-uses of the credit cards by non-owners, in France, the contactless payments are limited at 50€ / transaction and to a certain number of transactions per day. Beyond this number the owner will be required to use the card by introducing the PIN number.
In general, this system is seen as an advantage, as it eases the payment, which is done under the same security protocols, but with less “effort” (i.e. physical and mental, as one needs to remember the PIN code each time he/she does a payment). Yet importantly, since the outbreak of the COVID-19 crisis, this type of payment has become even more popular, as it allows for even less interaction with surfaces where potentially the virus may lay, i.e. the keyboard of the payment terminal. The banks in France have been receptive to this type of payment and the maximum amount for which the card can be used contactless increased from 30€ to 50€.
What are the disadvantages?
While the PIN number allows you, as the card holder, to be the only person who can undertake the purchase, not being obliged to use the PIN number for the purchases can put your card at risk. One can find your contactless card and use it several times a day for transactions bellow the ceiling of 50€, until you will have blocked it. For such situations, one can sign an insurance contract with the bank. Yet, the level of protection will very much depend on the type of the card and the type of the insurance contract proposed by the bank.
Conclusions
The contactless payments via the credit cards is for sure a plus for the way we interact with the payments. They are as secured as the traditional transactions that require a PIN number and, under the current situation, potentially healthier. However, not all shops allow for such transactions and for this you will need to ask whether such a payment is available in the shop.
You will need to be more careful with your contactless card, as in case of loss, it can be easily and rapidly miss-used by someone else, with clear repercussions on your funds. Therefore, you better watch your card and report the lost to the bank as soon as possible.
