Tap and Go: Everything You Need to Know about Contactless Credit Cards
July 17, 2018 | Posted by: Venus Zoleta | Credit Card
July 17, 2018
Ever tried tapping your credit card to pay for your purchases and bills? Yes, you read it right—some cards are tapped rather than swiped or dipped. These innovative payment tools are called contactless credit cards.
Contactless payment isn’t exactly new in the Philippines. As early as 2013, Filipinos have been using contactless credit, debit, and prepaid cards such as the Visa payWave.
While contactless technology isn’t a popular payment option yet, it has so much potential in the Philippines. In the 2017 Visa Consumer Attitude Study, 68% of Filipinos said they’re interested in making contactless payments. Over 25% have used contactless cards, and almost 75% preferred them over cash.
What is a Contactless Credit Card?
Photo from Freepik.com
A contactless credit card is a chip card that features both EMV and contactless technologies for easy and secure payments. If a card has the contactless symbol (that looks like waves), then it can make contactless payments.
Contactless credit cards use a short-range wireless technology called near-field communication (NFC), letting you pay without having to swipe or insert your card into a point-of-sale (POS) terminal. Just tap the card on the merchant’s contactless-enabled terminal, and your transaction is complete in a matter of seconds.
How do Contactless Credit Cards Work?
When you tap a contactless card on a POS terminal, the terminal reads the chip on the card and sends information (including your credit card account number, expiration date, and a unique code) to your credit card’s network (Visa or Mastercard). The network then verifies the data and analyzes it for fraud.
If the transaction is valid, the network sends its confirmation to your issuing bank. When the bank confirms your card has sufficient balance and isn’t stolen, the data goes back to the merchant, and your payment gets approved.
What are the Advantages of Contactless Cards?
1. Faster Than Other Payment Modes
Paying with a contactless card is easier and quicker than cash, debit card, and traditional credit card payments. A contactless transaction can be completed within 2 to 6 seconds, which is about twice as fast as other payment modes.
Since contactless payments don’t require a signature or PIN verification for purchases up to PHP 2,000, tapping your credit card is ideal for daily, small purchases such as fast-food meals, fuel, and groceries.
2. Safer Than Conventional Credit Cards
Contactless credit cards are more secure than magnetic stripe cards for the following reasons:
- Less chance of fraud. Your card stays with you—no need to hand it to anyone—during the entire transaction.
- No skimming. For every transaction, a unique, one-time sale identification code is created to protect your payment information. Even if fraudsters access your data, they can’t use it to make unauthorized transactions on your card.
- No accidental charges. Even if a scammer with an NFC reader is near you while you’re making a contactless payment, your credit card won’t be charged accidentally because it has to be close to the POS terminal for it to work. The same also goes for when another customer near you is tapping his card to pay and you have your contactless card in your hand or wallet.
- One-time billing. Your contactless card will be charged just once per transaction even if you tap it twice or more.
- Data encryption. Only authorized or certified POS terminals can process contactless payments. Other contactless terminals won’t read your card details.
3. Exclusive Promos for Contactless Payments
Sometimes, businesses and credit card providers offer promos to customers who pay with their contactless credit card. They may give away freebies, raffle prizes, or other special perks.
For instance, you can get a free snack when you tap a BDO Visa contactless credit card to buy SM Cinema tickets (Promo is valid until November 30, 2018).
What are the Disadvantages of Contactless Payments?
1. Security Issue with Small Purchases
Contactless payments are limited to purchases not higher than PHP 2,000, which means thieves can’t make big purchases with a stolen contactless card.
Still, the lack of authentication via a signature or PIN could be a security issue. What if a fraudster makes multiple purchases worth less than the PHP 2,000 cap? Those charges would surely add up to your credit card bill if your card got stolen and you weren’t able to report it to the bank immediately.
2. Temptation to Overspend
Because it’s a breeze to pay with a contactless credit card, it’s just as easy to spend more than necessary. In extreme cases, this behavior can max out a credit card and ruin one’s budget.
However, if you’re disciplined enough with your finances, overspending on a contactless card—no matter how convenient it is—won’t be a habit.
Which Banks Issue Contactless Credit Cards in the Philippines?
Most major banks in the Philippines have either the Visa payWave or Mastercard PayPass feature on select credit cards.
- BDO
- BPI
- China Bank
- Citibank
- EastWest Bank
- Equicom
- HSBC
- Maybank
- PNB
- UnionBank
Where Can You Use a Contactless Card?
Photo from Freepik.com
Millions of merchants worldwide accept contactless payments, including supermarkets, pharmacies, restaurants, and others with the contactless symbol at checkout.
In the Philippines, you can use a contactless card to shop at SM and its retail partners such as Ace Hardware and Uniqlo. You may even avoid the long queues at NLEX, SCTEX, and CAVITEX toll booths by tapping a Mastercard contactless card to pay for toll fees.
Here are a few other establishments where you can use a contactless credit card:
- Bookstores: Fully Booked and National Book Store
- Cinemas: Eastwood Cinema, Robinsons Movieworld, Megaworld Cinemas, and Newport Cinema
- Coffee shops: Figaro, Seattle’s Best Coffee, Starbucks, and The Coffee Bean and Tea Leaf
- Gas stations: Caltex
- Grocery stores: Marketplace by Rustan’s and Robinson’s Supermarket
- Pharmacies: Mercury Drug and Watsons
- Restaurants: Army Navy, BonChon, J. Co, Kenny Rogers, Krispy Kreme, McDonald’s, and Red Ribbon
Even if a merchant doesn’t have contactless-enabled payment terminals, you can still pay with your contactless card by inserting or swiping it into a POS terminal.
How to Use a Contactless Credit Card
Photo from Freepik.com
Using a contactless credit card is as simple as tapping a Beep card in MRT and LRT.
Steps to Paying with a Contactless Card
- Look for the contactless symbol displayed at the cashier counter.
- Tell the cashier that you want to pay with a contactless card. The cashier will then key in the amount to the POS terminal. Check if the amount is correct.
- When the light on the POS terminal blinks, hold your credit card flat over the contactless symbol on the terminal for a second or two. Ideally, your card should be 4 cm or less from the terminal.
- Wait for the green light to come on. This means the transaction is approved.
If your payment is PHP 2,000 or below, your signature isn’t needed. But if your transaction exceeds PHP 2,000, your credit card will be used like a regular card in which you’ll either sign the charge slip or enter your PIN.
Because contactless cards are designed to be a paperless tap-and-go payment mode, no charge slip is printed when the transaction is complete. But if you need a charge slip, you can request the cashier to print it.
How to Switch to a Contactless Card
Unlike the mandatory switch to EMV cards in the Philippines, your credit card provider won’t automatically issue a new contactless card to you, unless your expiring card is up for renewal or you’re replacing your lost or stolen card.
However, if you want a contactless credit card even though your existing card isn’t expired or lost, you can request for one by calling your bank or visiting its branch. Expect to pay a card replacement fee of PHP 250 to PHP 400, depending on the bank.
Final Thoughts
Now that you know how a contactless credit card works, as well as its pros and cons, will you use its tap-and-go feature when paying for your next purchases? Or do you still prefer the traditional way of using a credit card? Let us know in the comments!
