Is Contactless Payment Technology a Good Idea?
If the term ‘contactless’ baffles you, don’t get intrigued. It simply means using your credit, debit or ATM cards, or even smart mobile apps, such as Paytm and others, for financial transactions without using paper money. Switching from paper money to contactless payment technology is certainly a significant step ahead that is benefiting the users, but certain security issues remain.
What is contactless technology?
Technically speaking, this contactless technology relies on a secure microcontroller, an internal memory and an embedded antenna in a card that uses a reader to communicate via a contactless radio frequency. This technology is not confined to only plastic cards, but is also extensively being used in prepaid cards, watches, key fobs, documents and other handheld devices, such as mobile phones.
How does contactless technology function?
The contactless smart chips embedded in a device securely manages, stores and provides access to data by encrypting and interacting intelligently with a contactless reader. One of the prime utilization of contactless smart chip technology is contactless payments. These are simple monetary transactions don’t require any physical connection between the consumer payment and the physical point of sale (POS) terminal. This fintech is being used in a wide range of applications for secure and quick monetary transactions, protecting information on identification cards, electronic passports and visas, and many others.
Why use contactless payments?
This answer is speed and convenience. You don’t have to remember to carry cash, you don’t have to always remain guarded with money in your pocket, you don’t have to fumble with change, you don’t have to bother to carry enough cash for impulse buying of a major item and there is virtually no limit to purchases. Contactless payment technology is a win-win situation for both the buyer and the seller.
Is there any downside to contactless technology?
With transactions taking place in the virtual world, the risk of being hacked or money diverted to another account always hangs like the Sword of Damocles on our necks. However, many safeguards have been put in place to keep fraudsters at bay. This is an ongoing war that will continue to thwart the attempts of these ‘dark forces’.
Contactless payment technology is certainly a good idea and significant growth in its adoption is foreseen in the coming years all over the world. However it is definitely not 100% safe…