Guides & How To's

What is a Contactless Card and How do They Work?

Discover how contactless debit cards work

An image showing a contactless payment, with the question 'What is a contactless card?'

It’s not an understatement to say that contactless payments have revolutionised the way we shop. They have brought unprecedented convenience to the way we purchase goods and services in-store and their use has sky-rocketed during the coronavirus pandemic as retailers looked for easy ways to accept cashless payments.

Contactless cards have been around since in the UK and it’s estimated that there are now more than 110 million contactless cards in use around the country. 

What is a Contactless Card?

Unlike regular debit or credit cards, a contactless card doesn’t require you to swipe or insert it into a payment terminal. Instead, you use it by waving the card over a payment terminal and there is no need to touch it – hence ‘contactless’.

What do Contactless Cards Look Like?

contactless debit card looks like any normal debit card. However, you will know that it is contactless because it will have a little symbol consisting of a series of curved lines that gradually get bigger.

However, a contactless card doesn’t only come in the traditional form of a debit card. You can also get contactless cards in digital form. 

These can be loaded onto a smartphone and added to your digital payment wallet, allow you to use your phone to make a payment by holding it over the payment terminal. Digital contactless cards can also be loaded onto smartwatches and installed on key fobs.

So How do Contactless Payments Work?

When it comes to contactless debit cards, it’s all about radio waves. The cards have a tiny chip in them which works as an antenna to emit radio waves through what is known as radio frequency identification or RFID. This means that payment terminals effectively act as receivers for RFID technology.

Payment Smartphones and watches working use near-field communication or NFC, which works similarly to RFID.

Where can I use a Contactless Card?

Contactless cards can be used anywhere that accepts regular credit and debit cards. Most retailers from small corner shops to supermarkets accept contactless payments. You can use them at checkouts and self-service tills. 

A growing number of bars and cafes are now accepting contactless payments and the coronavirus pandemic has even led some of them to refuse to accept any cash at all.

Contactless payments can also be used at vending machines that dispense food and drinks. You can also purchase tickets for public transport using contactless payments or top up travel cards.

What Else do I Need to Know About Contactless Cards?

The amount you can spend using a contactless card is capped. When the payment method first became widespread, the upper limit was £30. However, early in 2020, when the coronavirus pandemic accelerated the use of cash-free payments, the limit was increased to £45. This has now increased to £100, starting from 15.10.2021.

You don’t need to use a PIN or signature to use a contactless card, so if it is lost or stolen, anyone can use it to make purchases. Some contactless card providers will monitor the use and disable contactless payments if too many are made in a short space of time.  

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