Using your phone to make contactless payments

If you’ve found yourself in a self-service checkout queue recently, you might have noticed people paying for their purchases by waving their phone at the terminal.

Unless you’re familiar with concepts like NFC and biometric fingerprint recognition, that could seem peculiar.

An increasing number of modern handsets support wireless payment technology, where a device is tapped against a terminal instead of being inserted or handed to a cashier.

The four-concentric-arc Contactless Symbol is becoming increasingly ubiquitous at payment points.

In theory, contactless payments should make transactions quicker and easier.

But is this rather mysterious technology worth having (and using) on your phone?

The science behind the swipe

Contactless payments use a protocol called near field communications, or NFC.

Information is requested from a host device using radio wave signals, and supplied by a second device (like a debit card or a mobile phone) across the same 13.56MHz frequency.

Modern smartphones essentially emulate a card’s ability to identify its owner without a security PIN code – which of course requires the phone to be set up for contactless payments.

This involves logging a bank account or credit/debit card registered to the phone’s owner on the handset, using specialist software such as Samsung Pay.

This is pre-installed on modern Samsung phones, displaying as a faint silhouette on the device’s home screen.

Drag the silhouette upwards, and the phone will display an image of the registered bank card while asking for the fingerprint ID of its registered user.

Once the fingerprint has been confirmed, the phone will approve fund transfers of up to £30 through a NFC-equipped terminal.

The advantages

Contactless offers a number of advantages:

• Convenience. The days of having to take your wallet out to buy a pint of milk are coming to an end. The smartphones we all carry can do the job of cash or credit
• Security. It’s possible to clone a bank card in a compromised chip-and-pin terminal, or read a PIN code over someone’s shoulder. A fingerprint can’t be obtained so easily
• Simplicity. If you’ve ever stood at the head of a queue, desperately trying to remember your PIN code, you’ll appreciate the simplicity of tapping a phone against the till
• Fraud reduction. Handing a card over to an unscrupulous individual could jeopardise the sanctity of its data, whereas NFC communications are encrypted and entirely electronic
• Speed. Holding a handset against a terminal is quicker than fumbling through a bag for a purse, then fumbling through the purse for a card, then inserting the card, then waiting…

The drawbacks

• Availability. Many older terminals aren’t NFC-compatible, requiring more traditional methods of finance. People aren’t confident yet about leaving their cards at home
• Multiple card challenges. Software like Apple Pay works optimally with a single card, and switching between different cards makes the process far less intuitive
• Limited volumes. To prevent fraud, transactions are limited to a maximum value of £30, which doesn’t buy you a huge amount these days
• Battery issues. A card never runs out of power, or goes into communications-disabling energy saving mode.

Conclusion

Contactless payments add technological and administrative burdens to retailers, but the benefits significantly outweigh drawbacks from a consumer perspective.

The process of registering a card in a contactless smartphone app is usually quick and easy, while purchases are also faster and less stressful without codes and signatures to worry about.

So far, concerns about one phone accidentally paying for goods at the next checkout till have proved unfounded, too.

However, contactless works best on devices also offering fingerprint recognition – there’s little benefit if a PIN is still required.