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Contactless Payment: Benefits and Drawbacks
Contactless cards are great for everyday purchases and have quickly become popular among consumers and businesses. To complete your payment, swipe your card or digital device at the point of sale.
Fremont, CA: Contactless cards are great for everyday purchases and have quickly become popular among consumers and businesses. To complete your payment, swipe your card or digital device at the point of sale. Both consumers and businesses benefit significantly from contactless payment. Here is a list of the benefits of contactless payment and concerns associated with it.
Key Benefits of Contactless Payment
The most significant advantages of contactless payment are faster transactions and shorter lines at the checkout. At the checkout, there is no need to worry about handling cash. You also avoid the hassle of entering your PIN.
• Safer transactions
Tap-to-pay technology is more dependable and secure than other payment methods. In addition, through encryption and dynamic data technologies, chip technology protects you from fraudulent purchases.
• Payment devices' adaptability
When you go cashless, you can say goodbye to bulky wallets. Instead, to make payments, all you need is an NFC-enabled smartphone.
• Loyalty perks
Most store loyalty programs work with the tap-to-pay smartphone you use to make payments. When you pay, they automatically give you discounts and loyalty points. In addition, when you use the contactless payment feature, some banks will provide you with cashback or other incentives.
• Acceptance is limited
Retailers gradually allow contactless payments, but consumers are still dissatisfied with the patchy coverage, particularly independent retailers. However, there has been an increase in the last few years.
• The Transaction Limit is Low
According to RBI regulations, contactless payments in India are subject to a cap of INR 5000* per contactless transaction. In order to protect against fraud, higher-value transactions necessitate the use of a PIN. Some customers may find this rule to hinder their overall shopping experience.
• Technical Constraints
In the case of mobile contactless payments, consumers face several technical challenges. First, it would help if you had an NFC-enabled smartphone to use the mobile tap-to-pay system.
• International Availability is limited
Mobile Contactless payment devices may not work in all countries. Despite similar technology, some mobile wallets used for contactless payments are not accepted in other countries. You may also be charged a foreign transaction fee.
• Concerns About Security
Because a contactless card transaction does not require a PIN, fraudulent purchases are at risk if the card is lost or stolen. Therefore, it is always good to notify the issuing bank in such a case. Most banks offer a 100 percent fraud guarantee, absolving you of any responsibility as long as you use it responsibly.