Contactless payment: its position on today’s technological market
You cannot buy products without paying for it. You go shopping, selecting what you need and take your money out to pay. How do you usually do it? Some people are used to paying conventionally with cash, but considering the development of modern technologies, credit cards are replacing cash ubiquitously.
The majority of shops have POS terminals installed that allow buyers to pay with credit cards easily. Moreover, today you can just wave your card over the terminal and payment will be occurred. This technology is called contactless and it is gaining a large popularity in all the world. High security and saving of time are the first reasons you should pay attention to contactless payment. Let’s find out more about this technology, its key players and what strong and weak sides it has.
Contactless payment: a word about
In fact, contactless payment allows to transmit all financial data via the radio channel. This technology got different designations in various payment systems like PayPass in MasterCard or payWave in VISA.
The first benefit you get is, of course, payment security. And promptness of the payment process. Your card is always in your fingers, nobody can steal data from it, so you can always feel safe.
And simply you don’t wait for change like when you pay with cash. The process takes a few seconds.
Despite the fact not so many countries are using this technology everywhere, they constantly keep on integrating it in their POS terminals. Technology also requires an appropriate software and it is necessary to know how much it costs to create an app like this.
Besides that, modern smartphones are equipped with NFC feature – a technology that allows you pay with your device. It replaces a card and you don’t need to store dozens of plastic cards in your pocket. And such IT giants like Google and Apple are getting ahead in this area. So we should tell you more about capabilities of devices from these two manufacturers.
Competitors in contactless payments: what do they propose?
Mobile payments already exist more than one year and they are developing extremely fast. All people carry a phone today, so payment using mobile device became a really good and breakthrough option. You are not afraid that you forgot your card or its PIN code. So that is why Google and Apple are gaining the lead. Let’s start with Apple, what can it propose to us?
Apple Pay
Apple Pay system was presented to the public only 3 years ago. You need to download an app to use it, but the main secret is hidden inside the Apple device itself. It can be both iPhone and Apple Watch.
Users can get a digital card from iTunes and use it as a conventional banking card via NFC technology mentioned above. That is you wave your smartphone over the terminal, confirm payment and voila! It’s done.
Android Pay
Google devices use the same NFC technology. But only another operating system – Android. However, this system is not worse than Apple Pay and it is the main competitor of Apple. Why? The matter is that Android Pay is compatible with a larger number of devices than Apple system.
We will speak more about its compatibility a bit later.
Are there any more players?
This question may naturally arise since Google and Apple are not the only IT companies in the world. Such giant as Samsung has also participated in the development of payment system called Samsung Pay. But the matter is that it uses Magnetic Secure Transmission Technology (MST).
This technology is considered to be rather archaic and not so secure. That is why Samsung Pay is not so popular.
Systems compatibility
Android Pay system is functioning in all Android devices with OS version not older than KitKat 4.4 and supporting NFC. So it is an obvious advantage since only in the USA there are about 50 millions of Android users.
Apple Pay is also trying to be the first, but the problem is they have limited range of products supporting Apple Pay.
But anyway these both systems have the strongest security level and they both can be useful for you.
How do Apple and Google secure their systems?
Touch ID is a special identificator that uses a fingerprint of the user or a password. All transactions and card numbers are stored in Apple devices. If you lost your device, this information will be restored from the server.
In addition, Lost Mode feature allows you to deny an access to your personal banking data. So you shouldn’t worry about it.
Ok, what about Android Pay? Its system also allows you to use your fingerprint to confirm payments. But this feature is available only in versions starting from 6.0 Marshmallow. However, there are also tokenization feature and Android Device Manager that you may use to control your device remotely.
Despite some disadvantages, these companies are working on their improvement and we may hope that systems will be modified.
Strong and weak sides of mobile contactless payment
Now let us speak about advantages and disadvantages of contactless payment system generally.
Strong sides
It has many advantages you obligatorily should know. So don’t ignore it.
User-friendliness
In the first turn, everything is developed for users. They get something that is convenient for everybody. Their smartphone becomes both wallet and computer for solving various problems. All in one. Such system accelerates payment process, and time is money, remember.
Reducing expenses
Say “No” to the expensive equipment. You don’t need to give the change. Also, no more paper prints and expenses for ink. Everything is processed in the cloud. What can be better?
Fast mobile funds transfer
When you transfer your funds using a mobile phone, money is traveling much faster than via common terminals or banking branches. But of course, you cannot forget about force-majeure situations when something goes wrong.
Loyalty programs
Pay with your phone and get a bonus! This program is simple but it motivates people to use their phones for payment everywhere. Or users can get some discounts from every payment. This feature can attract a lot of users.
Cards live longer
Let’s speak a little about contactless cards. If you stop inserting in terminals and ATMs, it will serve you many years until it expires. There is no any mechanical contact with equipment so your card will become immortal.
Weak sides
Now it is the time to mention dark sides of contactless technology. Please, check it.
Fraudsters are not sleeping
Yes, contactless technology can be related to the most secure way of payment, but, unfortunately, fraudsters are also trying to follow all new security trends and elaborate the way to hack them. Today there are gadgets that can steal the signal from your phone and use your financial data at their discretion. So never lose your attention.
Archaic technology
Unfortunately, not all terminals support NFC and not everybody has new smartphones. So even if you have already got a contactless card, you might not have an opportunity to use it if you don’t have an appropriate equipment installed in your region.
Platforms difference
Somebody prefers using Android device. Somebody – Apple. But these two technologies have the difference in their hardware and not all terminals support both payment systems. Apple Pay has Secure Element for data protection, while Android Pay uses Host Card Emulation. So if you would like to pay with Android Pay, for example, it may turn out to be impossible.
Old habits
Not all people can switch to the new type of payment. They feel much more comfortable when they pay with cash, as it was before. So it will take some time while people get used to paying with their phones or contactless card.
So let’s sum up. Contactless payment technology has a colossal future. But there are some pitfalls manufacturers need to avoid to make a really powerful technology. We think they will do their best and soon everybody will forget about the cash. Phones will become our wallets.
About the author:
Nataliia Kharchenko is a Technical Writer at Cleveroad. It is web and app development company in Ukraine that successfully implements various projects of any complexity. The main goal of the company is to provide clients with quality and exceptional software.
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