Contactless payment systems include credit and debit cards, key fobs, and other mobile devices like smartphones that allow you to make secure payments by simply swiping the card or other device over the reader's terminal. Although there are some similarities between contactless payment and mobile payment, which can also be done on your smartphone, the main difference between the two is that mobile payment generally uses a wider cellular or Wi-Fi network, while contactless payment uses one requires great physical proximity.

Contactless payment cards are normal chip-and-pin cards with an additional antenna that enables secure contactless communication between your card and the reader. Typically, contactless credit and debit cards have a maximum range of about two inches, which means that they have to be held fairly close to the reader in order to receive its radio frequency. As soon as the signal is received by the card's antenna, the payment is processed. Requiring close proximity also helps avoid accidental and erroneous payments. On the subject of bad payments, let's discuss the main advantages and disadvantages of contactless cards.

Advantages and disadvantages of contactless payment
Some bank customers are concerned about the security of contactless cards. The top security concerns relate to what happens if you lose your card or it is stolen. The answer is that unless you manage to block your card before someone tries to use it, you are very likely to lose a small amount of money. The good news is that banks have come up with several security tricks to minimize the risk of losing money in the event of theft. All contactless cards have relatively low limits on the amount you can spend without entering your PIN. These limits vary from country to country and range from 10 EUR in the Baltic States to 1000 CNY (~ 137 EUR) in China. In addition, many banks require you to enter your PIN after 3-5 consecutive contactless payments, even if the transaction does not exceed the spending limit. If your card eventually falls into the wrong hands and you lose money, your bank may offer a refund.

Still, it is believed that banks see contactless payment as a way to make money with shopkeepers who pay for the merchant terminals that support contactless payment and for processing transactions, at the expense of the security of customers' money. These costs could explain why relatively few merchants in some countries offer the option of paying with contactless cards. This means you may not be able to use the contactless payment method on your new card.

Contactless payment - the future of bank cards?
The main advantages of contactless payment cards are the convenience and time saved with every transaction. These are the two main reasons bank officials believe contactless payment is the future, not just for credit and debit cards, but for smaller payments in general. Technological progress is increasing the popularity of contactless payment with both customers and merchants. According to MasterCard, around one billion contactless payments were made in Europe alone in 2015, 150% more than in the previous year.

Before explaining contactless payments as the future of our daily transactions, consider whether each payment is capped. Currently, contactless payments can only be used for a small proportion of transactions due to low spending limits that differ from country to country. Banks are therefore faced with a serious decision at some point - between increasing these limits, which could endanger the security of their customers' money, or contactless payments at a certain level.

Banks that offer contactless payment
One bank that is very interested in contactless payment is Barclays. Back in 2010, Barclays began swapping its regular credit and debit cards for new contactless ones. It has gone much further since then, introducing new digital payment devices to its customers - such as a wristband, keychain, and even a sticker.

Other banks around the world have been issuing contactless payment cards to their customers for a number of years. HSBC started replacing old, expired cards with new contactless cards in mid-2014. Other banks, such as the Royal Bank of Scotland, are following HSBC's lead. Scandinavian banks, including Nordea and SEB, are also introducing contactless payment cards.