What are Contactless Debit Cards and How to Use Them?
28 October 2022
Debit cards have made daily transactions very convenient. As per RBI, transactions below Rs.5000 can be completed without entering the4-digit PIN. And this is where a contactless debit card comes into play. They have made money transactions easier than ever before.
Read on to understand the features and benefits of contactless debit cards, how they work, how to use them, where you can use them, safety and more.
What is a Contactless Debit Card?
A contactless debit card facilitates close-range transactions. The user has to hold this card above the card reader to complete a transaction. It involves no physical contact. In many ways, it is similar to a mobile wallet. Additionally, the user can complete the entire transaction in a few seconds.
How Do Contactless Debit Cards Work?
A contactless carduses either Radio Frequency Identification (RFID) or Near-Field Communication (NFC) technology. When a user makes a purchase, these cards use radio waves to share his/her debit card, bank account, and phone app details with the merchant’s card reader.
It uses a one-time password or code for securing the card information. Moreover, every transaction is encrypted so that fraudsters cannot access crucial details like the user’s name, card number and CVV code. Another advantage of contactless cards is that it reduces the processing time compared to swiping or inserting a debit card.
How to Use a Contactless Debit Card?
Give below are the steps for using a contactless debit card:
Step 1: Search for the contactless symbol on a card reader at any Point of Sale (PoS) terminal. Four curved lines depict the contactless feature of a debit card. This symbol should be present on both the card and card reader
Step 2: The cashier will enter details of your purchase amount into the said terminal. The contactless reader will display what you need to pay
Step 3: Hold the contactless debit card less than 4 cm above the contactless symbol of the card reader
Step 4: A beep sound or four green lights will signal the successful completion of a transaction. Moreover, the card reader will display a message after completing a transaction
Note – You need to enter your debit card PIN in the third step if the transaction amount is over Rs.5000.
You can use a contactless debit card at merchant and shopping outlets, grocery stores, movie theatres, petrol stations and restaurants. You can use contactless cards only at establishments and outlets that support contactless technology.
So, before you use a contactless smart card, make sure to check if the card reader supports it.
How Secure is a Contactless Card?
These points address security concerns related to contactless cards:
Contactless cards come with multiple levels of security that aid in fraud prevention
When you use a contactless debit card, the transfer of requisite information takes place via an encrypted format. Even if this card falls into the wrong hands, deciphering such information will be difficult
Contactless debit cards emit very short-range radio waves. If one does not place the card within 4 cm of the machine, transactions will not be successful
Only KYC-compliant merchants can use POS terminals. If someone misuses a card and a fraudulent transaction occurs, he/she can be easily identified
In the case of contactless card theft, the financial institution will block one’s card as soon as they are notified of it. No transaction can occur after that
As it does not involve physical contact, users do not have to hand over their cards to the cashier. This negates any chances of hackers using duplicate magnetic stripes to steal important card details
Benefits of Using Contactless Debit Cards
These are some of the advantages of using contactless debit cards:
These cards come with several layers of security. As a result, there is little threat to the security of your private information.
•Quick and Convenient
The processing and execution of transactions take place within seconds. Using this card will save a lot of your valuable time as it does not involve the hassles of multiple steps. Instead of having to hand over the card, insert it into a PoS terminal and enter a PIN, you only need to move it near the card reader.
If you compare it to EMV chip-based cards, you will see that contactless debit cards are more long-lasting. This is because they require less handling. Frequent swiping and dipping lead to EMV chip-based cards wearing out quickly.
•No Direct Contact
With these debit cards, you do not need to touch any surface, which is beneficial during times that demand social distancing. Moreover, the tap-to-pay feature of the card ensures that it remains in control of only the cardholder.
Contactless debit cards can be used for transactions below Rs.5000. You can use them at places where contactless technology is supported. Inserting and swiping your debit card is no longer required and the high-end technology ensures safety from money fraud. So, next time you need to use your debit card, just tap and get the transaction done in seconds!
FAQs on Contactless Debit Cards
Q1. How many times can you use a contactless debit card?
Ans: Generally, there is no limit to the number of times you can use your contactless debit card in a day. However, it is a good idea to check with the financial institution that has issued the card. The bank often asks you to insert a PIN if you make multiple contactless transactions in a day or if the amount exceeds the limit allowed for a single contactless payment.
Q2. Can I use a contactless debit card in ATM?
Ans: Yes, one can use a contactless debit card for various purposes like withdrawing cash from ATMs. Additionally, users can use these cards for online shopping and eCommerce purchases. It is absolutely safe to use contactless cards.
Q3. Who issues contactless debit cards?
Ans: Debit cards are always linked to bank accounts and issued by banks. On the other hand, all sorts of financial institutions, including banks, NBFCs and other approved entities, can issue credit cards.
Q4. Is there any limit on contactless transaction amounts?
Ans: As per RBI regulations, one can make contactless payments only up to Rs.5000 in India for a single transaction. If the transaction amount exceeds Rs.5000, then the user needs to provide a PIN for authenticating the transaction.
Q5. Does using a contactless debit card involve any risk?
Ans: Contactless cards are as safe as chip cards and have more security features than magnetic stripe cards. As these cards require a PIN or an OTP for every contactless transaction above a certain limit, there is less security risk. This is because the same code does not get used again and again, making it harder for hackers to get private information.
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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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