What are Contactless Payments?

If you’ve ever made an in-store purchase, you’ve probably heard of contactless payments. This relatively recent innovation in consumer technology has revolutionized how people make both in-store and online transactions. It started as an obscure payment method and is now considered the fastest and most convenient way to make purchases.
Mykhailo Glodian
Mykhailo Glodian
Head of Growth @ MeaPay
What are Contactless Payments?

If you’ve ever made an in-store purchase, you’ve probably heard of contactless payments. This relatively recent innovation in consumer technology has revolutionized how people make both in-store and online transactions. It started as an obscure payment method and is now considered the fastest and most convenient way to make purchases.
And it’s not limited to credit and debit cards – you can even pay using your smartphone, tablet, and smartwatch! But what are contactless payments, exactly? How do they work? And why is everyone using them?
Here’s what you need to know about the contactless payment revolution!

Contactless Payments, Tap to Pay, and Tap & Go

When it comes to defining contactless payments, it’s all in the name! Contactless payments are transactions that are made without your card coming into contact with a payment terminal or card reader. Contactless payments, also known as ‘Tap to pay’ or ‘Tap & go’, can also be made with your iPhone or Android phone, tablet, or iPad (granted your device is enabled with the right technology).

How They Work

The technology responsible for contactless payments is Near-Field Communication, a subset of Radio-Frequency Identification (RFID). RFID is a form of communication technology used everywhere- it’s the same system that operates your key card for your gym and tracks your luggage at the airport. The big difference between these technologies is that NFC is designed to work over very short distances.
NFC uses electromagnetic radio fields to transmit data between two devices. This information is transferred up to a distance of 1.5 inches. Of course, these devices need to meet certain specifications to be able to send and receive this info, which is why you can’t just use any credit card or phone on a contactless terminal. Your card or device needs to be NFC-enabled.
Contactless payment allows your credit card, debit card, phone, or any other NFC-enabled device to transfer your payment information through radio waves. When held close to an NFC-enabled terminal, or ‘tapped’ against the terminal, this information will be read by the payment terminal. This is how your payment is authorized.

Why is Demand for Contactless Payment Growing so Fast?

Contactless payments are on track to being the most popular purchasing method. And it’s spreading to online and in-app transactions too! But why is this technology soaring in popularity?
It’s simple – contactless payments are faster, easier, and more efficient than using cash, or traditional credit card payment methods. A Tap to pay transaction is 3 times faster than these older payment methods.
NFC-enabled POS terminals are also becoming more accessible around the world. For a while, this technology was only used by major companies. But today many smaller businesses are adapting to the new technology. Now you can find tap-to-pay options in many mom-and-pop stores, and this ease of access has made millions of people more accustomed to using this payment method without blinking an eye.
Not to mention, NFC contactless payment is one of the safest ways to make purchases. But we’ll cover the security aspects of this payment process in more detail below.

How Contactless Payments Have Evolved

Though it might feel like we’ve had contactless payments forever at this point, they only entered the public consciousness recently.
Contactless payments have been used as early as the 1990s, though employed using multiple different technologies (you can find more information on how NFC is being used around the world here). However, it was only in the 2010s that these payment processes entered common usage. Let’s jump into the evolution of contactless payment.

  • 1995 – The first use of contactless payments can be traced to Seoul, South Korea, where the city’s Bus Transport Association initiated the UPass system. It was a contactless way for commuters to pay for their bus passes.
  • 1996 – EMV standards are introduced, where a tiny computer chip is installed into credit cards: it is a new alternative to the magnetic strip and signature which had been the standard until that point.
  • 1997 – the US oil company Mobil set up the SpeedPass, a fob that could be used by their customers to pay for gas.
  • 2003 – The Oyster card system is introduced to the London Underground, where commuters can pay their fares with a contactless card.
  • 2007 – the Barclaycard becomes the first contactless card issued in the EU.
  • 2008 – Visa, American Express, and MasterCard begin offering cards with NFC_enabled contactless payment features.
  • 2011 – Mastercard Paypass and Visa Paywave are introduced. Google Wallet and Android Pay are also launched, with Android pay being NFC-enabled.
  • 2014 – Apple releases Apple Pay to a limited market.
  • 2015 – NFC-enabled terminals are implemented across the U.S. Contactless payment options spread to other devices, such as the Apple Watch.
  • 2019 – Major credit unions in the US begin offering NFC contactless payment credit cards.

If the trajectory of the tap-to-pay timeline is anything to go by, contactless payments will only continue to rise in popularity in the future.
How Contactless Payments Have Evolved

Contactless Payments Options

Believe it or not, contactless payments aren’t limited to your credit or debit card. They are also accessible through digital wallets, where you make payments using your mobile phone. There are multiple digital wallets available, depending on the kind of phone you used.

Google Pay

Google Pay is a mobile service that lets Android phones, tablets, and watches make contactless payments without the use of a credit card. It was first developed in 2015 as Android Pay, then re-released as Google Pay in 2018. This service is supported by most major banks in almost 30 countries, and can be used to make purchases both in-store and online, and can be used for peer-to-peer money sending.

Apple Pay<

This next digital wallet is, unsurprisingly, made for Apple devices. Apple users can use their phones to pay for in-store, online, and in-app purchases, and there is no spending limit for this digital wallet. Initially released in 2014, Apple Pay is supported by most major banks and is available in over 50 countries.

Samsung Pay

Samsung Pay was released in 2015, as a mobile payment service for users of Samsung mobile phones and other Samsung devices. It can also be used to make contactless in-store payments and authorized online purchases. Samsung Pay is not limited to NFC-based payments – it also employs magnetic secure transmissions (MST) which allow users to make payments with non-NFC-enabled payment terminals. This service is currently supported in 28 countries.


Many major banks are now offering contactless ATM services. This means that customers can use their cards and digital wallets to withdraw money without making contact with the ATM itself. Simply passing your card within an inch of the wireless symbol is enough to authenticate a transaction, allowing you to take money from your account.

Touch and Go Card Payments Versus digital wallets

But which is better? Are there more benefits to making contactless payments through your digital wallet than through your card?
The most obvious benefit to using a digital wallet over card payments is the convenience. If you’re a minimalist, it means one less thing to carry and potentially lose, which is an attractive prospect. With mobile phones, you only need to leave the house with your keys and phone. There’s no more digging around in your wallet or purse to find your credit card.
It’s also more secure. If a thief were to steal your NFC-enabled card, they could make multiple transactions with it before your card is disabled. However, if they were to steal your phone they would have to unlock it first, meaning they’d need access to your passcode, fingerprint, or face ID. As long as your phone is locked, contactless payments can’t be used.
However, the fact that you need to unlock your phone every time you want to make payments could undermine the instant-access nature of NFC that makes contactless payment so attractive.

Contactless Payment Benefits


No Infection Risk

Since the rise of the global pandemic, retailers and consumers have been looking into new ways to minimize contact and further reduce the risk of virus transmission. This new way of making purchases without actually touching a POS means you can safely enter stores and purchase goods without worrying too much about your environment.
This means you can go about your regular shopping schedules with little to no fear of infection. In the current climate, this is an invaluable benefit for retailers and shoppers alike.


By and large, contactless payments are the fastest of all payment methods. That includes the use of both cash and traditional credit and debit purchases. As mentioned above, contactless payments take your card as little as one-third of the time to process payment then it would swiping a magnetic stripe or inserting your EMV chip.


Contactless payments are one of the most secure payment methods you can use and have some of the lowest rates of fraud. Security measures around NFC-enabled payments have developed so fast as the technology has been introduced to the market, that the fraud rate for contactless payments between 2017 and 2018 declined by 33%!

Factors You Need to Consider

Tap to pay is a fantastically convenient method for making purchases, but that doesn’t mean it’s perfect. Here are a few things you should consider if you’re just getting acquainted with this new payment technology.

Card Limits

Many banks have historically had a low spending limit for their contactless cards, often as low as $30 to $40 per transaction. It can be frustrating for those of us who want the speed and convenience of contactless payments while making those larger purchases.
On the other hand, contactless payment limits are there for a reason. These limits are one of the basic ways that your bank or card provider can protect you from fraud. Think about it – if someone steals your card and tries to use it, they’ll be stuck making small purchases of $30 or $40. This will also give you more time to cancel your card and contact the issuer before they have spent significant amounts of money.

What if You Need to Use Your PIN?

Speaking of spending limits – if your card has a cap on how much you can spend per contactless transaction, you will usually be asked to enter your PIN which will allow you to spend above your card limit. For some, this is a significant drawback, as it undermines the nature of contactless payments.
Not only because it will take close to the same amount of time as using your EMV chip or magnetic strip, but because it means you’ll have to touch the payment terminal. This can make contactless payments seem less useful if you are trying to minimize contact with public surfaces during the pandemic.

Card Limits are Increasing

Since the beginning of the covid-19 pandemic, banks and credit card providers have begun to push through limit increases. This has made it safer, easier, and faster for people to do their shopping with contactless payments. This can both ease stress on businesses and retail workers, and potentially help to reduce virus transmission in public spaces.
The rise of coronavirus has prompted more than 50 countries to increase limits on contactless payments. The UK Treasury raised contactless payment limits from £30 to £45 in 2020, and £100 in 2021. But of course, this has also raised fears around fraud risk since higher limits will make it easier for thieves to steal large amounts of money using contactless payment.
Card Limits are Increasing

POS Devices Need to be Equipped to Process Contactless Payments

Despite the growing popularity of Tap to pay, there are still many businesses that don’t offer this service. It can cost time and money to install NFC-enabled POS devices, and many stores will need time to catch up.
Don’t expect to be able to use contactless payments everywhere you go. In truth, if you want a single payment method that can be used anywhere, contactless payments probably aren’t your best bet. But this is likely to change in the future.

Security Under the Spotlight

When you’re using new technology, the first thing that you’ll want to consider is security. In today’s world, we constantly feel threatened by the idea of hackers and other cybersecurity threats. So how safe are contactless payments?

Contactless Payment Security

The first thing to remember about contactless payment? A transaction can only occur when the NFC-enabled device and payment terminal are within 1.5 inches of each other. This means that any potential ‘eavesdroppers’ have very little space to intercept the radio wave signals and collect any data that is being transferred.
And on the off-chance that they could intercept these NFC transmissions? Well, contactless payments are also secured by a unique, encrypted code. Every time a transaction is made with a card or digital wallet, your bank will send this unique code to the POS to authorize your payment.
But that little code doesn’t hold all of your payment details – only your bank account number is sent, and it doesn’t include your name or your card verification code. So even if someone could intercept your payment signal, they’d come up empty. This is a big part of why contactless is one of the most secure payment methods available.

NFC versus EMV

When it comes to security, NFC contactless payment is often compared to EMV. EMV stands for ‘Europay, Mastercard, and Visa’, and refers to credit cards that are fitted with a smart chip. These smart chips were designed to replace the traditional magnetic stripe on your card. The chip is where your data is stored so that your transactions can be processed by EMV-enabled terminals.
These days EMV is the standard for credit card processing across the globe. It is only recently that contactless payments with NFC technology have begun to challenge this, as more and more businesses have adapted to the demand for NFC-enabled terminals.
Both EMVs and NFC-enabled payments employ ‘dynamic authentication’, where a unique encrypted code is generated for every transaction. These codes cannot be replicated by potential fraudsters, and in general, it is much harder for payment information to be stolen from either card.
However, NFC is one step above EMV in terms of security, and that’s due to digital wallets. Since services like Apple Pay and Google Pay are entirely NFC-enabled, contactless payments can only be made when the user unlocks their phone or app using a passcode or biometric fingerprints. This is an important point to consider if you are choosing between making EMV or NFC payments.

Credit Fraud Compensation

Here’s one thing that should ease your mind if you’re unsure of using contactless payment. As this patent method becomes widely used, many major credit card providers (including Mastercard) are willing to reimburse their customers for any fraudulent transactions. So even if your card is stolen and purchases are made, you’re unlikely to lose that money in the end.

Digital ID and Biometrics

In the last few years, attention has been raised about the need for digital ID as a comprehensive way to authenticate contactless payments. This will take contactless payment security one step further, ensuring that everyone who wants to use Tap to pay will feel 100% safe and secure in the process.
At the Money2020 Europe conference in 2019, it was unanimously agreed that a functioning digital ID system would be needed to spur on the world’s move to contactless payment. Though it’s unclear what form this ID system will take, the aim is to make it as simple and easy to use as possible, so as not to stall the process of making payments.
The concept of fingerprint biometrics being used to authenticate contactless payments has also been suggested. Tap to pay users might be seeing new cards available that are installed with biometric sensors, similar to the ones used to unlock smartphones. Though these ideas haven’t been incorporated yet, the future is looking bright for contactless payment security.

A Personal Guide to Making Cashless Payments

If you’ve never used a card or phone that has contactless payments enabled, there are a few simple things you need to know first.

Look for the Wireless Symbol

So you know the WiFi symbol that you use when you’re looking for an internet connection? That same symbol can be found on the corners of credit and debit cards that are NFC-enabled, with the “curves” of the symbol stacked horizontally rather than vertically.
If you have never used contactless payments before, you may already have an NFC-enabled card. Just look out for the wireless symbol on your card! If it’s there, you should be able to use it on tap-to-pay terminals. Otherwise, you can get in touch with your bank or card company issuer to ensure that this feature is activated on your card.
This also applies to NFC-enabled POS terminals. You might be wondering – so where I can use contactless payments? If you’re unsure of whether Tap to pay is available in your local stores, just look for that wireless symbol on any given terminal.

Make Sure Your Phone or Wearable Device is NFC-enabled

Now you know how to identify if your card can make these payments, what about your phone? You can only use Tap to pay if your iPhone or smartphone is NFC-enabled. To do this, you can search your settings for ‘NFC’. If there is no ‘NFC’ option, your phone likely cannot make payments.
You can also check with your mobile company to see which models are eligible to use Google Pay, Apple Pay, or Samsung Pay. Often their older models are not NFC-enabled.

How to Load Your Card Onto your Payment-enabled Phone or Device

To turn your phone or device into a digital wallet, make sure you’ve installed the correct payment service onto your phone. This will likely be an app for Google, Apple, or Samsung Pay. With an iPhone, you can find Apple Pay in the Wallet app.
If using your phone or tablet, you should be asked to take a photo of your credit or debit card. This will allow the app to scan your card details and store them in the app. You then need to annually save your payment details. If you have a smartwatch or Apple watch paired with your device, you should be able to automatically add those card details to your watch.

How To Use Apple Pay



How To Use Google Pay



How To Use Samsung Pay



Final Thoughts

It’s clear to see that contactless payments are taking over in the payment sphere. This is particularly true as the global Covid-19 pandemic drives customers and retailers to find safer ways to buy and sell in the marketplace.
This new way to spend money without having to count your change, sign a slip of paper, or punch in your PIN has become the go-to method for millions. It’s faster, safer, and easier than almost all the alternatives. And it even allows you to make payments through your phone or smartwatch!
And as modern shoppers reach for more convenient ways to spend their money, one thing is clear – contactless payment won’t be going anywhere.

Related Posts

It’s time to accept contactless payments on your Android device!

Secure contactless payment solution for all Android devices

Secure contactless payment
solution for all Android devices


Akersgata 41, 0158 Oslo, Norway
MeaPay careers
Privacy policy / Cookie policy


qr-code-3 1 (1)

© 2022 MeaPay. All rights reserved


We use cookies to ensure that we give you the best experience on our website.
Cookies Policies.