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Contactless Payments


Contactless Payments may be a brand new payment type but Canadians are embracing contactless payments at record rates, very much eclipsing contactless payment use in the United States. In Canada, Visa reported that 48% of recent point of sale transactions were contactless while only 1% were in the United States during the same period. However, even though Canadians use of contactless payments is far greater than Americans, many Canadians are hesitant to use the new form of payment because of concerns it is much less secure than familiar forms of payments. Part of this concern may be based on consumers not understanding how contactless payments works and therefore educating consumers in important especially considering most Canadian payment cards are dual interface variety that supports both contact and contactless transactions.


Steps in Contactless Card Transactions

  1. When a credit card is brought near a credit card reader, the credit card reader energizes the contactless credit card

  2. A radio connection is then created between the credit card reader and the credit card

  3. An encryption key is then sent to the reader; the encryption key is a private encryption key owned by the card issuer

  4. The card then decrypts the encryption key

  5. The credit card reader then sends the card the transaction details

  6. The card uses its private key to create a document with all relevant transaction details, encrypts it and then transmits it to the reader

  7. A receipt for the transactions is sent by the reader to the card to be stored as a reference

  8. Both the contactless cards and the payment processing system will have the reference numbers for the transaction

Like many new forms of payments before it, it will take time for consumers to feel comfortable using contactless payment credit cards. However, with the popularity of contactless payments growing due to the ease and speed of use the demand for credit card machines that take contactless payments will likely increase as will the speed of making payments

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