DEFINITION of ‘Contactless Payment’
Contactless payment is a secure method for consumers to purchase products or services via debit, credit or smartcards (also known as chip cards), by using RFID technology. To make a contactless payment, a person simply needs to tap their card near a point-of-sale terminal – leading to the nickname “tap-and-go”.
Since contactless payments do not require a signature or a PIN, transactions sizes on cards are limited ($25 in America). Also, because of the lack of signature or PIN, transactions can be carried out faster – much to the content of both the merchant and the consumer.
BREAKING DOWN ‘Contactless Payment’
Examples of non-credit or debit card contactless payments include transit cards, Apple Pay and Google Wallet. Most banks offer contactless payment cards and convenience merchants like 7/11, McDonalds , CVS, Arby’s and Subway are some of the larger adopters of the contactless point-of-sale terminals.