The presence of the pandemic has brought many changes to our world. One of the significant ways it has affected us is how we handle money and transactions.
Contactless payment technology has surged in the last 2 years, and for good reason: being able to make swift transactions that are not only convenient for our fast-paced world but also the exchange of germs and viruses can be minimized.
So, how exactly does the contactless payment method work? And what new forms of this technology are being made available. Keep reading to find out more.
How Does Contactless Payment Work?
Contactless cards, and the like, use a type of technology called radio-frequency identification, (or RFID). This technology comprises two components: the tag (cards, smartphones, etc.) and the reader (payment terminal). RFID tags can store a surprising amount of encrypted data that is communicated to readers through radio waves.
Each transaction is given a unique serial number that can be traced by the cardholder’s bank. This number functions as a virtual substitute for the actual card number. Therefore this technology is far more secure than the magnetic stips of old.
Safe to say, contactless cards are more secure than the traditional method of dialing your PIN into a keypad.
Types of Contactless Payment Technology
Thanks to the versatility of this technology, contactless payment currently comes in various forms. There is the physical credit or debit card with RFID technology.
Also available is a concept called a Mobile Wallet. This is usually thanks to an app like Google Pay or the ones available at https://bentoforbusiness.com/features/virtual-debit-cards/. These programs transform your smartphone into a virtual debit card, for instance.
Gadgets like smartwatches also have the ability to serve as tags for contactless payments. The mind boggles at what could be next technologically!
What Are the Benefits?
Besides the increased security that contactless technology has over previous payment methods, the ease of use and time factors are not to be overlooked. The world continues to warm to this form of technology in areas like public transport and parking. The time saved in handling cash and time spent in long queues need not be a concern of yours.
For business owners, this kind of technology is ideal for making purchases. For instance, sending employees to make purchases without the need to share sensitive information with them may also be an advantage.
The Future of Transactions?
In the age of the NFT and cryptocurrency, one thing is clear: the way we see money and transactions are evolving. The contactless payment method appears to be here to stay in some form or other. Knowing how this technology works brings its users peace of mind. It also highlights the inevitability of becoming part of our daily life sooner than we think.
Still not convinced? Why not stick with our site and do more research on the world of business and finance? Research and education are the keys to a secure financial future.