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As credit cards became ubiquitous, consumers no longer had to dig for bills or coins in their wallets or await change. Everyone got used to swiping and signing, and later, inserting a credit card into a machine.
That sped things up compared to cash, but if you traveled to Asia or Europe in the last decade or two, you were probably shocked to see the proliferation of contactless payments. In recent years, this technology has finally taken off in the U.S., making card payments even faster—and safer.
Contactless payment is a way to pay in person with a debit or credit card, either by tapping an enabled card, smartphone or even a smartwatch at a terminal.
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How Does Contactless Payment Work?
Contactless payments work in one of two ways depending on whether you're using your card or a device like a smartphone or smartwatch. Either way, contactless payments are typically much faster than other ways to pay. You might hear them referred to as "tap and go" or "tap to pay."
Contactless payment uses near field communication (NFC) or radio frequency identification (RFID) technology to wirelessly complete a transaction. It works a little differently depending on how you choose to pay; you tap (really hover) an enabled card or digital device at a payment terminal.
Contactless Card Payments
If your credit or debit card is enabled for contactless payments, it will have a symbol on the front or back with several curved bars on it, similar to a Wi-Fi symbol. These cards still typically have a chip so you can pay even if the point-of-sale doesn't have contactless payments available. If you're ready for a card that provides contactless payments, Experian can show you credit card offers based on your unique credit profile.
Contactless Smartphone/Wearable Payments
Whether you have a contactless card or not, you can load an eligible card into a device with a digital wallet. This allows you to store your cards digitally and make contactless payments by tapping your smartphone or smartwatch (or an enabled fob or other wearable) rather than a card. You can store multiple cards and choose which one you want to use at checkout. This saves time by not having to take out your wallet (or bring it at all).
Is Contactless Payment Safe?
Contactless payments might seem a little risky if you've never used them before, but they're actually much more secure than paying with a card by swiping.
When you tap a card or device at a payment terminal, a one-time code is generated that protects your information from being used for unauthorized payments, similar to an EMV chip card. This helps reduce occurrences of fraud.
Also, these cards aren't so sensitive that you can pay by accident. Payment is only transmitted when the device is tapped or within two inches of the terminal, and only when the retailer initiates the payment. Plus, if you're paying with a digital wallet, you can require extra security measures like requiring a passcode, fingerprint or Face ID before payment is approved.
How to Use Contactless Payment
If your credit or debit card is enabled for contactless payments, it will have a contactless payment symbol on the front or back. You can use it at payment terminals that have the same symbol or where retailers display language about tapping to pay.
Some retailers also have symbols on their terminals indicating that they accept contactless payment from digital wallets like Apple Pay or Google Pay. Any terminal that accepts contactless card payments will also accept digital wallet payments.
If you don't see any symbols or language about contactless cards or digital wallets, you'll likely have to insert the card. Just ask the retailer if you're unsure.
If you're at a payment terminal that does accept contactless card payments, hold your card within an inch or two of the contactless payment terminal once the retailer is ready to accept payment. After a few seconds, if approved, you'll hear a beep or see a light or check mark indicating approval.
If you're using a digital wallet, you'll mostly follow the same steps. But instead of using your card for payment, you'll hold your phone or smartwatch up to the terminal. Depending on your settings, you may have to enter a passcode or confirm a biometrics prompt in order to complete the transaction.
You typically don't need to sign for contactless transactions. But be aware that for some larger contactless payments, usually ones over $100, merchants might still require a signature.
Frequently Asked Questions
Contactless payment is rapidly growing in acceptance across the United States, with thousands of major businesses and small shops offering it for customers making in-store purchases.
The public transportation systems in certain cities, like New York City and Portland, Oregon, and even London allow users to pay with a contactless card or digital wallet.
Contactless technology has wide global acceptance, so you can use contactless payments in many countries when traveling abroad. However, some countries limit the size of transactions made via contactless payments.
Just like swiping a traditional credit card or shopping online with a debit card, there's no limit to how many times you can use a contactless card in a day. You can use contactless payments as many times a day as you want—as long as you don't exceed your credit limit or overdraft your checking account.
Yes. If you're using a debit card—either tapping a contactless debit card or a digital wallet connected to one—you can still get cash back.
Even with traditional debit cards, not all merchants offer cash back, and those that do may have limits or security requirements. If a merchant does offer cash back, you can do it with your contactless card, though you may be required to still insert or swipe your card and enter your PIN for additional security.
The Bottom Line
The new era of contactless payments is finally here. This type of transaction is flexible, allowing you to pay with a debit or credit card and by tapping a contactless card or a digital wallet on your phone or wearable.
It can be tough to stick to the habit of using contactless payment at first, but going contactless is actually one of the safest ways to pay and it can save you time.