Santa Claus comes around just once a year. In the meantime, there are Credit Cards.
  • Contactless Credit Cards: All You Need to Know

    You have heard of swiping your credit card (when the magnetic stripe is passed through a card reader), you have heard of dipping your credit card (where the chip is inserted into the card reader), now get ready to tap your credit card.

    That’s right. Thanks to contactless credit cards, you can ow just tap your card to a point of sale machine, and the transaction is complete.

    What Is a Contactless Credit Card?

    If your credit card has a symbol on it that looks like the ‘wifi’ symbol, then you own a contactless credit card.

    These cards help you make payments without having to physically swipe or dip the card. All you have to do is tap the card against the card reader (the card reader also needs to be enabled for contactless payments), and the transaction is complete.

    It provides convenience and prevents you from having to stand in long queues to make a payment.

    How Does a Contactless Credit Card Work?

    Contactless cards use a technology called bear filed communication (NFC). NFC uses magnetic field induction to enable communication between NFC devices when they are brought together or within a few centimetres of each other.

    Moreover, each card comes with a contactless chip and an antenna known as the radio frequency (RFID) antenna. So, when you wave your card over a contactless terminal, the radio frequency (along with a one-time code) help you complete your purchase.

    Additionally, since you don’t have to enter your PIN for transactions below Rs.2,000, this form of payment is usually completed within a few seconds.

    Are Contactless Credit Cards Safe?

    The question that now arises is with regards to the safety of contactless cards. If you don’t have to swipe or dip your card, what are the chances that you walk past a contactless card reader and it (without your knowledge) deducts money from your credit card?

    The answer to this question is simple. This won’t happen. It won’t happen because of the different layers of security that go into a contactless card.

    In order to better understand how safe contactless cards are, let’s take a look at some of the common myths and the actual truth.

    Myth 1: A thief can make transactions with your card, without it leaving your pocket and without your knowledge.

    Truth: For a contactless transaction to take place, the credit card and the reader need to be at least two inches away. So, the chances of this happening are extremely slim. Moreover, if you do find that you have been wrongly charged, you can always raise it with your card issuer. This way you will not be held liable for the transaction.

    Myth 2: All your information is transmitted to the merchant when you use a contactless mode of payment.

    Truth: This is actually far from the truth. When you make a contactless payment with your credit card, information such as your name, your billing information, or your CVV are never transmitted to the merchant. Instead, only your account information along with a one-time password or code is sent from the card to the reader.

    Myth 3: A person may mistakenly be charged for a purchase even if they just walk past a contactless terminal.

    Truth: Unless the contactless machine has been tampered with, it is highly unlikely that you will be charged just by walking past a machine. Moreover, you can place your card in wallets or cases that provide contactless protection for additional safety.

    Myth 4: You can be charged twice for the same transaction without your knowledge.

    Truth: This cannot happen since each contactless transaction requires you to tap your card or be within a few centimetres of the card reader. In addition to this, a one-time code is transferred from the card to the reader for each transaction. Moreover, contactless point of sale (PoS) readers allow only one transaction at a time.

    So, it’s quite clear that most fears that surround contactless credit cards are unfounded and they are safe to use.

    How to Use Contactless Credit Cards

    As mentioned earlier, using a contactless credit card is extremely simple. There are three steps that you need to follow:

    • Look for the contactless payment symbol at checkout.
    • Tap your card on the machine (in most cases, you don’t even have to hand your card over to the merchant. As such, you end up having complete control over your card).
    • Once the machine beeps or a green light is seen, it means that your transaction has been successful and you can go on with the rest of your day.
    • If your transaction amount is greater than Rs.2,000, you will need to provide your PIN for the transaction to go through.

    Note: According to the RBI, transactions below Rs.2,000 do not require you to provide your PIN.

    Best Contactless Credit Cards

    At present, there are over 20 million contactless credit cards in circulation in India and the numbers are expected to grow. So, how do you decide which contactless credit card you should go for? While contactless payments work the same way on all credit cards, here are cards that offer contactless payments along with other features that you can consider:

    HDFC Regalia First/Regalia Credit Card:

    • Joining Fee: Rs.1,000
    • Renewal Fee: Rs.1,000

    Key Highlights:

    • Get 7,500 reward points when your expenses reach Rs.6 lakh in one year
    • Earn 5,000 reward points when you spend over Rs.3 lakh in a year with HDFC Regalia First/Regalia Credit Card
    • Get 1% surcharge waiver on your fuel transactions (Transactions between Rs.400 and Rs.5,000)
    • When you spend Rs.1 lakh within the first 12 months, you will get a waiver on the next year’s renewal fee
    • Get 3 free visits to lounges outside the country within one calendar year

    SBI Signature Contactless Card:

    • Joining Fee: Rs.4,999
    • Renewal Fee: Rs.4,999

    Key Highlights:

    • Get 10,000 bonus points when you spend Rs.3 lakh and more in one year using the SBI Signature Contactless Card.
    • Receive 10,000 bonus points when your expenses hit Rs.2 lakh and more every year
    • 30% discount on green fee at over 300 golf clubs in the world
    • Rs.500 discount every month when you book tickets through BookMyShow
    • Access to over 600 airport lounges in the world
    • Hire a car from Hertz Car Rental Program and save up to 10%

    ICICI Bank Coral Contactless Credit Card

    • Joining Fee: Rs.500
    • Renewal Fee: Rs.500

    Key Highlights:

    • 1 free railway lounge visit within a quarter
    • 1 free domestic airport lounge visit in a quarter
    • Up to 2.5% cashback and a 1% waiver of surcharge when you spend Rs.4,000 at HPCL petrol bunks using this ICICI Bank Coral Contactless Credit Card.
    • 15% discount on your dining expenses

    Kotak Royale Signature Credit Card

    • Joining Fee: Rs.999
    • Renewal Fee: Rs.999

    Key Highlights:

    • 4X reward points every time you spend Rs.150 on travel, dining, international expenses and air tickets.
    • 2 BookMyShow vouchers when you swipe the Kotak Royale Signature Credit Card for the first time
    • 2X rewards when you spend Rs.150 in other categories

    Citi Cash Back Credit Card

    • Joining Fee: NIL
    • Renewal Fee: NIL

    Key Highlights:

    • 5% cashback when you pay utility bills using the Citi Cash Back Credit Card.
    • 5% of cashback on all your movie ticket expenses
    • 0.5% cashback on other expenses
    • No expiration date for your unredeemed cashback points

    IndusInd Bank Signature Legend Credit Card

    • Joining Fee: Rs.9,999
    • Renewal Fee: NIL

    Key Highlights:

    • Receive 2 reward points every time your expenses touch Rs.100 on weekends
    • Get 1 reward point every time you spend Rs.100 spent on weekdays
    • Get 4,000 bonus reward points when you spend Rs.6 lakh and more within a year of your IndusInd Bank Signature Legend Credit Card being issued
    • Get a 1% waiver on your fuel expenses

    Benefits of Using Contactless Cards

    Now, that you know quite a bit about contactless cards, here are some of the other benefits of these cards to help convince you to apply for one (if you aren’t already convinced):

    1. No credit card skimming:
    2. Card skimming is the easiest way for fraudsters to get your card details. Your card information is usually taken by these fraudsters when they take your card to swipe it or dip it in the card reader. This is entirely minimised with contactless cards since it doesn’t leave your hand.

    3. Additional layers of security:
    4. As mentioned earlier, contactless payments are quite safe. Moreover, even if your card is tapped or waved multiple times, the security measures in place ensure that there are only a minimum number of transactions that can be made before you will be required to enter your PIN.

    5. Protection from fraud:
    6. If a fraudulent transaction is made using your card, you don’t have to worry since you will not be liable for those transactions. Almost all banks provide you with 100% liability cover.

    7. Shortens your wait time:
    8. With a contactless credit card, you don’t have to spend time at checkout waiting for the merchant to swipe or dip your card, enter the amount, request you to enter the PIN, and then approve the transaction. All you have to do is tap the card to the reader, wait for it to beep or turn green, and you are good to go.

    Frequently Asked Questions on Contactless Credit Cards

    1. Why should I use contactless?

      Contactless as a form of payment is generally more secure since you don’t have to hand the card over to another person. Moreover, it helps you save time.

    2. Where can I use the Contactless Credit Cards?

      You can use the Contactless cards at any place that has a POS Machine. The card can be used to tap and pay. Any POS Machine that comes with a contactless symbol has been enabled for contactless payments.

    3. In case the card is waved twice at the POS Machine, will I be charged twice?

      No, even if the card is waved twice, you will be charged only once.

    4. How are the purchases shown in the monthly statement in the case of contactless cards?

      Any purchases that are made using the contactless mode will be shown the same way as those made using a regular card.

    5. How will I know if my transaction has been successful?

      You will receive an SMS/email to your registered mobile number/email ID and will also get a charge slip if the transaction has been successful.

    6. How far away from the contactless machine should my card be held?

      You should hold your card within a distance of 4 centimetres.

    7. Where can I make contactless payments?

      You can make a contactless payment at any terminal or point of sale machine where the contactless symbol (wifi symbol) appears. At all other terminals, you will have to either swipe or dip your card and enter your PIN to complete your transaction.

    8. Is the Rs.2,000 transaction limit valid all over the world?

      No, the Rs.2,000 transaction limit is not valid all over the world. The limit depends on the country where the transaction has been made. The Rs.2,000 limit is valid across India.

    9. How do I pay with Mastercard contactless or Visa PayWave?

      To make a payment with Mastercard contactless or Visa PayWave, you need to just tap your card against a contactless-enabled terminal. When payment is successful the terminal beeps or a green light appears.

    10. What if my contactless credit card is lost or stolen?

      In case the Contactless Credit Card, you must block the card. The card can be blocked by using one of the below-mentioned channels:

      • By visiting the bank
      • Calling customer care
      • Using the mobile app of the bank
      • Internet banking

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