How contactless payment technology works: components and benefits

SSPDaily has prepared an article about the principles of contactless payment. Learn about its internal structure and the revolution in the field of transactions.

How it works

Contactless payment technologies work on the basis of Near Field Communication (NFC) or Radio Frequency Identification (RFID) technology. As a result, users can make secure and convenient transactions without physically swiping their card or inserting it into a payment terminal. When a contactless payment card or device, such as a smartwatch, is held up to a payment terminal, the necessary transaction information is securely transmitted, verified, and processed.

Components of contactless payment technology

The components involved in contactless payment technology include a payment terminal with a built-in chip capable of processing contactless transactions and an antenna for signal transmission. There is also a contactless payment card or device with an embedded contactless chip that generates a unique transaction code when exposed to the terminal's radio frequency signal. This transaction code is then transmitted back to the terminal for verification.

Advantages

Contactless payment technologies offer advantages such as convenience, increased security, and faster transactions. Users can make payments quickly and easily without having to carry physical cards or cash.

The encrypted transmission of payment information protects against fraud, and the speed of contactless transactions reduces queues and increases efficiency. As mobile payment solutions and devices become more popular, contactless payments are expected to become even more widespread in the future.