European countries have been much faster to adapt to contactless payment methods than the U.S. to date. However, since 2020’s advent of a worldwide pandemic, more attention has been paid to contactless methods.

According to the World Health Organization, "Hands touch many surfaces and can pick up viruses. Once contaminated, hands can transfer the virus to your eyes, nose, or mouth." Since the onset of the COVID-19 pandemic, contactless payment is becoming a more essential technology.

In a country where convenience is king and the pandemic has caused a change in everyday life, it’s puzzling that these methods haven’t been adapted more rapidly. Invisible payment methods include a simple wave of your cell phone, smart watch or credit card instead of swiping or inserting into a point-of-sale (POS) terminal.

So how exactly do these method work? An individual simply enters their credit card details to a digital wallet app—such as Apple Pay, Samsung Pay, Google Pay, or Fitbit Pay. One is now set to pay by holding the device near a POS terminal. The terminal uses near-field communication (NFC), a short-range implementation of RFID, to read the details of the particular wallet. Because NFC works only at a distance of less than four inches, it is nearly impossible to get payment information crossed with someone else who is waiting in line.

Another positive feature is that the transaction is currently more secure than utilizing a card that is present. Credit card information is stored securely on an individuals device, and in the case of Apple Pay, they present a one-time use soft token to the device that processes the payment. The token enables the digital settlement and the funds are billed to your credit card without the vendor ever having access to your credit card data directly.

Contactless payments are expected to grow more popular, overtaking cash and credit cards in the future. Savvy consumers will become familiar with the various methods as they develop and provide additional convenience and safekeeping.

For more information, contact Mel M. Toy, CTP Director of Treasury Services at PyraMax Bank.