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Contactless Payment

Contactless Payment. What is Contactless payment?. The latest implementation of wireless payment A device with a tiny chip and antenna embedded in it Communicates through radio frequencies (RF) Devices include: Plastic cards Watches Key fobs. Money clips Cell phones. How DO They Work?.

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Contactless Payment

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  1. Contactless Payment

  2. What is Contactless payment? • The latest implementation of wireless payment • A device with a tiny chip and antenna embedded in it • Communicates through radio frequencies (RF) • Devices include: • Plastic cards • Watches • Key fobs • Money clips • Cell phones

  3. How DO They Work? • Tap and Go technology • Customer must hold the device in front of a sensor, usually on a Point of Sale (POS) terminal • Smart chip and antenna in the device transmits a unique code to the sensor • After the transaction is complete, the consumer either hears a beep or sees a flashing light • The transaction goes through the sponsoring networks (MasterCard, American Express, Visa) system to be cleared and settled • If the purchase more than $25, a signature or PIN may be required

  4. Obtaining a Device • Contactless payment devices are distributed through financial institutions and connected to issuers such as Visa

  5. Companies Using Them • First issued by Exxon Mobile in 1997 • “Speedpass” is used at gas pumps • Still used today • Today • American Express – ExpressPay • MasterCard – Paypass • Visa – Visa PayWave • Discover – Zip

  6. Issuer Benefits • Issuer • Contactless payments have: • Increased credit and debit card transactions • Decreased cash transactions • Improved customer retention and loyalty • Provided co-branding opportunities • Provided new service opportunities

  7. Consumer Benefits • Consumer – seek speed and convenience • Faster check out times and less waiting in line • Convenience of not carrying cash • Easier to use – no PIN or signature required if under $25 • Improved security – consumer is in control of the device at all times • Better record keeping with monthly statements compared to cash

  8. Merchant Benefits • Merchant • Increased customer loyalty and satisfaction with the store experience • Reduced time at the cash register • Improved operational efficiency – less cash handling • Increased revenue from increased consumer spending per transaction • Decreases concern of counterfeit money or insufficient fund checks

  9. Availability • Over 35,000 merchant locations are enabling their POS systems to accept contactless payment • Meijer Stores • KFC • McDonald’s • Arby’s® • Walgreens • AMC Theaters • Subway • Cold Stone Creamery

  10. Safety • Contactless payment as implemented by American Express, Master Card, Discover and Visa is secure • Older forms with radio frequency identification (RDIF) do not have the same safety features • Devices could be read from a few inches to a few feet away increasing the risk of fraudulent use

  11. Safety • American Express, MasterCard, Discover and Visa contactless payment devices include: • Unique codes that change for each transaction • Payment networks can detect and reject any attempt to use the same code more than once • Therefore, if a fraudster should “read” information from a contactless transaction, the information would be useless • The customer’s name is not exchanged between the device and the terminal • Some smart chips in the devices do not even hold the customer’s name, therefore ID theft is more difficult

  12. Safety • Some payment devices do not include the cardholder’s account number • They use an alternate number that is not used in any other transaction, therefore ID theft is more difficult • Transactions are completed solely by the customer • The device is never handed over to a store clerk, therefore personal information is kept more secure • Smart chips only send signals a short distance, 2-4 inches • The customer needs to make a deliberate effort to initiate the payment transactions

  13. Protecting one’s Identity • As with all forms of electronic payment, it is important to follow the following safety precautions • Do not leave contactless payment devices lying around home or school • Close unused accounts in writing and by phone, then dispose of the device • Check financial institution statements and credit report to ensure all charges are legitimate

  14. Protecting one’s identity • If a contactless payment device is lost or stolen, report it to the sponsoring financial institution immediately • $50 liability • Keep financial institution statements and other documents with personal information in a secure location • Prevent a thief from securing a contactless payment device under false pretenses

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