Visa payWave and Mastercard PayPass are new ways to pay for your everyday purchases without your physical card touching anything. To use this feature, you need to wave your card in front of a contactless debit/credit card terminal and your transaction will be processed. There are no additional steps to complete, like signing a receipt or inputting your PIN to authorize the transaction.
You can only use contactless payment for purchases under $100. You can tap and go for everyday products and services like groceries, gas, clothing and much more.
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Eligibility criteria, terms and conditions, fees and charges apply
Purchase interest rate
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- Purchase interest rate: 19.99%
- Cash advance rate: 22.99%
- Balance transfer intro rate: 1.99% for the first 6 months
- Regular balance transfer rate: 22.99%
- Annual fee: $99
- Credit rating: Good, Excellent
- Minimum age: Age of majority in province/territory of residence.
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What is Near Field Communication (NFC)?
Near Field Communication (NFC) is a technology that enables your mobile phone to securely transmit and receive information over a short range, typically requiring a distance of 4cm when making a payment. It is an upgrade of the existing radio-frequency identification (RFID), which combines the interface of a smartcard and a reader into a single device.
Visa payWave and PayPass have NFC technology that make contactless payments possible. Referred to as “tap and go”, you can then either wave or tap your credit card at a contactless debit/credit machine to pay for products or services without the need to key in your PIN number or signing a receipt.
What are the pros and cons of tap and go?
- Convenient, since you only have to “tap and pay” using your credit card or smartphone.
- No keying in a PIN or signing a receipt.
- Gives you peace of mind as you are protected against fraudulent transactions.
- Reduces threat of hackers who scan cards and steal valuable information, since NFC uses data encryption when sending sensitive information.
- Cost and time efficient for the average consumer.
- You don’t have to worry about typing errors (such as incorrectly entering your PIN) and the connection is quicker on the contactless terminal.
- Retailers no longer have access to your credit card information.
- You’re able to keep track of rewards and use points for your purchases or redeem miles. Some banks even offer cash back and prizes when you use this feature.
- Convenient and quick checkout payments means shorter wait times in line ups at stores.
- Only some businesses have adopted this technology, so it might create confusion or frustration among users.
- Not all consumers are educated about this technology.
- Only consumers with smartphones or those with contactless credit cards can use this technology.
- You may lose your credit card and your account may be compromised.
- Risk of spyware or malware attacks and other viruses like any computer device in the terminal.
- You can only make contactless payment purchases of up to $100.
If you run a small business, updating your credit/debit terminal to one that offers contactless payments provides your customers with faster and more convenient card processing. However, upgrading could attract additional upfront fees and extra costs for training to get used to the new system. Compare different card payment systems and weigh up the potential benefits versus the costs to decide if this option is right for your business.
- Eddie is the Divisional President: Mastercard Australasia
- He was previously SVP at Mastercard Southern Africa
“PayPass is a fast, convenient and safe way to pay for purchases of less than $100 and involves a simple tap of a card against a contactless reader, making it ideal for use when customers would generally use cash,” says Eddie Grobler, Divisional President of Mastercard Australasia, in a press release.
“Contactless is the way to make and accept payments – it’s quicker and more convenient for consumers and allows merchants to accept more payments at peak sales times. It helps reduce the delays caused by queuing or searching for change and, with consumers already noticing the benefits, we believe it will be available across a large number of retailers in the next couple of years.”
Both Visa payWave and Mastercard PayPass contain a technology called NFC, which requires you to hold the card within 4cm of the card reader and carries a unique security code per transaction for fraud protection. It carries the same layers of security as any other Visa or Mastercard chip card and is backed by their respective Zero Liability Policy.
While it’s convenient and efficient to have this payment method in place, a lot of consumers have questioned the security implications of using this technology. However, Mr. Grobler has announced there are plenty of security measures in the place.
“For online purchases, merchants will be required to offer Mastercard SecureCode authentication, or equivalent, for items over $200 and for purchases at the point of sale, we are ensuring that all cards and terminals will be EMV capable.”
“These measures will add an additional layer of security to an already robust system.”
“Trust is at the very core of our business. We want our cardholders to feel safe about using their cards which is why we are continuing to invest in stringent security measures. Between now and 2013, security for online payments will be a primary focus, which is great news for merchants and consumers alike.”
Eddie Grobler image: nfcworld.com
NFC image: nxp.comBack to top