16 February 2015

Contactless payment: what it is and how it works

Contactless payment is rising in popularity, according to the UK Cards Association*. With the contactless transaction limit rising to £30 in October 2015, we look at the growth of contactless, how it works and where it’s headed in the future.

What is contactless, and why use it?

First introduced to the UK in 2007, contactless card payment is a payment method where you hold your debit or credit card against a reader, rather than inserting it and entering in your PIN. As with a regular card payment, your account is then debited for the amount. 

You'll need a contactless-enabled card to pay this way. If your card is contactless it should show the contactless icon (it looks a bit like a Wi-fi symbol) printed on the front to one side. At the moment, you can pay up to £20 with contactless. Our video highlights some of the reasons more and more people are choosing contactless.

But is contactless safe?

In October 2014 alone there were more than 38 million contactless transactions in the UK, valued at just under £297 million*. Despite its rising popularity, the UK Cards Association found just 0.007% of contactless spending in the first 6 months of 2014 to be fraudulent.

So, what’s next for contactless?

Contactless is currently available on debit, credit and pre-paid cards, but is set to be rolled out on mobile phones, wristbands and watches in the not-so-distant future.

* Figures provided by UK Cards Association based on number of contactless transactions January 2011 - October 2014.

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