Advantages and disadvantages of using contactless credit and debit card

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Contactless Debit Card: Now a days, credit and debit cards issued by banks carry a symbol which resembles to that of Wi-Fi. Such Wi-Fi enabled cards, are also referred to as contactless cards. These cards allow the user to make contactless payments of up to Rs 5,000 on a POS machine without using PIN.

Such cards work on NFC (Near Field Communication) and RFID (Radio Frequency Identification) technology. They carry a chip, that is attached to an extremely thin metal antenna, which allows the user to make payments by leveraging radio frequency technology. This payment technology is growing rapidly in developed countries. In Australia, Canada, the UK and France, one in four cards is contactless. Now the new cards that are coming in India are contactless.

Advantages and Disadvantages

One disadvantage of using such cards is, if your wallet is not RFID protected, you are vulnerable to fraudsters who can withdraw money just by touching bringing a PoS machine in close contact with your pocket or wallet. The range of such cards is 4 cm and only one transaction can be done at a time. While these cards are known as Wi-Fi credit-debit cards, but they work on radio frequency, not Wi-Fi.

In 2016 a photo went viral in which a thief was seen standing in a train with a PoS machine in the midst of a crowd. Transactions can be done only by touching the card from the POS machine. No PIN is required. In such a situation, anyone can easily misuse your card. Even OTP is also not required in this.

At the same time, ease of usage is one advantage of contactless cards, as transactions hardly take any processing time. You can make the payment without swiping the card. There is no need to give the card to anyone.

For payments exceeding Rs 5,000, it is necessary to enter the PIN. Users must take precautions while using such cards. Don’t forget to take the bill while shopping. Check how much amount has been filled by the cashier. If there are more cards, then decide from whom to pay. While making payment in a hotel or shop, do not hand over the card to the shopkeeper. – Swipe it yourself and check the SMS alert for the transaction immediately.