What is contactless payment cards?
Delivers REAL benefits for merchants
This is not another chip & PIN
For high value payments ( > $30/ €25/ £20 )
For low value payments ( < $30/ €25/ £20 )
Traditionally, to conduct a payment transaction at a POS (Point Of Sale) terminal,
actual physical contact was required between the card and the terminal.
The consumer was required to swipe their card... typically for a magnetic stripe card or insert their card into a reader for contact chip cards.
The advent of RFID (Radio Frequency Identifier transponders) technology enables terminals and cards to exchange data without physical contact.
The card (whether chip-enabled or not) can be tapped or waved by the consumer within radio frequency distance of the terminal. This is referred to as "contactless" card support.
Contactless Payment Cards CPCs are debit, credit and charge cards including...
With contactless payments using a mobile phone or a contactless card its possible to do point-of-sale POS transactions without the need to verify the cardholder...
The so called "no-CVM" transactions, if the transaction is a "low value" transaction.
In case of a "high value" transaction cardholder verification is always required.
The amount which determines whether a transaction is a "low value" or a "high value" transaction:
A good question to ask...how do contactless payment cards work?
UK banks and International banks such as NatWest/ Lloyds/ HSBC/ Australia/ Barclays/ Halifax/ Santander/ JCB/ Vodafone/ Oyster/ Japan/ Ireland/ Citi/ RBS/ TFL do advertise about its products - contactless payment cards.
With contactless payments "no-CVM" transactions can be done in any merchant environment...
Where Maestro PayPass/ Visa PayWave/ blink/ American Express ExpressPay is accepted, whereas with contact payments "no-CVM" transactions are only allowed in specific merchant environments (For example, parking garages, tollways, transit vending machines).
For example, in some countries, for example, MasterCard or Visa may grant a waiver that support for "no-CVM" transactions at transit vending machines is not required.
CVM stands for Cardholder Verification Method, therefore, method to verify (authenticate) the cardholder (For example, "Online PIN", "Offline PIN", "Signature", no CVM required).
The contactless application (PayPass) on the debit or credit card only supports Online PIN and no CVM required as allowed CVM. So no CVM in this context means "no PIN".
The CVMs that EMV supports are:
Contactless Payments are about targeting cash payments and these are focussed in a number of key sectors.
Sectors such as...
Yes! You can use contactless payment cards on buses or trains. As you know, contactless payment cards (CPCs) are debit,
credit and charge cards that use radio frequency technology for quick and easy payments.
They are increasingly being issued by banks and credit and charge card companies.
Customers who have CPCs can now use them to pay for single journeys on buses in London, United Kingdom (UK) or using OV-Chipkaart on metro trains (metro travel) in Amsterdam, Holland/Netherlands.
If you have a debit, credit or charge card that has been issued in the UK and displays the contactless payment symbol (pictured on the left), you should be able to use it on buses or underground tube (metro trains travel) to pay for single journeys.
When you touch your CPC on the yellow card reader, you are giving authorisation for the cost of a single bus journey to be deducted from your card account.
You can visit London to see how they run Time zones and Transport and the Train Line, but don't drive as there is
congestion charging by the Greater London Authority in association with London Transport.
Check the Street map or Multimap or even the National Rail Enquiries for convenience alternative routes, or perhaps you may take the National Express coach.
For anyone who has recently travelled on the London Underground or bus network the idea of a contactless payment system
won't come as a complete surprise.
The Osyter card, run by the Transport for London (TfL), has been hailed as a success from both the transport industry and, more importanly, from the Users themselves.
The payment card allows users to store transport ticket value on the contactless card, with each journey cost subtracted from the card, simply by placing the card near a reader.
But given that this is a closed system only currently working on the Underground and London bus network, how would the concept of contactless payments transfet into a retail environment?
In London UK, as a financial capital of the world, payment system uses contactless technology as a way of paying for goods in retail outlets.
The basic concept of how contactless payments work is that the system has been devised to take the place of low-value cash transactions.
It is not another another payment method looking to replace existing credit or debit card payments.
Imagine and consider your average working day and it's not too difficult to understand what the contactless payment system is designed for.
May be you drive or take bus or catch the train to work, either way contactless payment is designed to help you in any number of situations.
For example, you arrive at the car park, but don't have any change for the ticket machine, contactless payment will be a quick and efficient way to pay for your car parking without the need forlooking for coins.
The main issue for transit payment systems is speed. Transactions must be fast enough to maintain a very high throughput of passengers (35 per gate per minute in the case of TfL.
This means that total transaction time needs to be below 500 milisecond. Consequently online processing is unlikely to be feasible and transactions will normally be performed offline, with later online authorisation if necessary.
Fraud was on the increase. By the beginning of 21st century, plastic card fraud was increasing year-on-year and was
one of the fastest-growing crimes in the UK.
The Chip and PIN programme was one of the most complex ever to be undertaken in the UK. It required a high dregree of trust and interdependence between organisations and sectors.
A radical, coordinated cross-industry approach was going to be needed to tackle the problem.
A number of countries, including the UK, were introducing smart chips on cards to meet new global specifications known as EMV (Europay/MasterCard and Visa).
Smart chips store data more safely than magnetic strips and are difficult to counterfeit; in time they will allow cards to be accepted all over the world using standardised security checks.
In addition, it was known that a PIN-based system would go a long way to reducing two of the largest categories of fraud:
A domestic PIN-based system in France had seen an 80% reduction in fraud since its introduction in 1992.
Whereas the French initiative had been driven through by government, the UK's introduction of Chip and PIN was led by the retail and banking industires. Yet at that time, relations between the industries were at all time low.
Something had to change. Retailers were insisting on greater transparency and fairness in the interchange mechanism for charging them, and these issues had recently caught the attention of the Office of Fair Trading and the European Commission, both of which had launched investigations.
Smart card or ICC (Integrated Circuit Card) is the general term for a credit or debit plastic card that contains an integrated circuit chip.
Chip carries instructions that provide security and application support. There are wide varieties of Chip memory sizes with different capabilities.
There multi-applications with payment and non-payment applications.
ICC has the following security features...
Magnetic stripe card are cheap and reliable. It works globally through use of ISO standards.
Easy for fraudsters to copy and is a read only mechanism and limited data capacity.
A magnetic stripe card is a type of card capable of storing data by modifying the magnetism of tiny iron-based magnetic particles on a band of magnetic material on the card.
The magnetic stripe is read by physical contact and swiping past a reading head. The advantages include:
Some disadvantages of using magnetic stripe cards:
Compared to magnetic stripe, the smart card (EMV) is more secure. By having chip on the card,
smart card protects the information stored from damage or theft. Current magnetic stripe cards
have limited capacities to copy information.
By using smart cards that have greater capacity, customer profiles can be broader and information can be easily added or deleted from the memory.
In addition, smart card can perform decision making due to the powerful processing capabilities, such as data encryption.
EMV is a set of chip card, terminal and application specifications developed and promoted by
Europay, MasterCard and Visa.
It's a global interoperability which uses original Specs EMV "96 version 3.1.1 and is currently EMV 2004 version 4.2. The EMV Specifications consists of...
An EMV application is not an implementation specification. But a Card Scheme implementation specs of:
The Chip applications comply with implementation specs and have multiple applications possible on same card.
The following emv security is used:
You will notice that the rise in international skimming losses is not being seen in European countries where regional
card blocking, often known as geo-blocking, has been widely implemented.
Keeping an active magnetic stripe on a European EMV card continues to make that card vulnerable to card skimming and geo-blocking significantly reduces the risk of successful compromise.
The RFID (Radio Frequency Identification) reading technology enables the transfer, by radio, of information from
electronic circuit to a reader, have opened up some interesting possibilities in the area of e-payment.
Today, the near field communication technology (NFC) opens up even more horizons, because it can beused to set up communications between different electronic devices.
Contactless cards, telephones with NFC capacities, RFID tag have been developed in industry and the services. Contactless smart cards RFID is used in all areas of automatic data capture allowing contactless identification of objects using RF.
There is a number of applications ranging from secure internet payment systems to industrial automation and access control.
RFID technology solutions, including electron data carrier architecture and common algorithms for anti collision which give rise to the RFID applications, such as the smart label, e-commerce and the electronic purse, document tracking and e-ticketing.
RFID is a major growth area in auto ID, allowing emergency vehicles to safely trip traffic signals, and providing the technology behind contactless smart cards, auto piloting cars, and production automation.
A smart card fare payment generates a transaction record every time a card is processed at a read-write device, with the exception of designated terminals that only provide remaining value information to the patro.
These transaction records are an asset that has significant value and thus needs to be managed.
A data management policy provides the guidelines for the participants in an interoperable smart card system for managing this data assert. It a minimum, a data-management policy should address the following:
To determine if a smart card fare payment system may be at risk of invading an individual's right to privacy, the system's data needs to be analyzed to determine the personal identifiable information that is collected in the normal course of business.
POS contactless amount is the maximum amount of contactless POS transactions done with a
debit or credit card per day.
The Daily card limit to mitigate the risk that when the card is stolen or lost, someone else (who knows the PIN) can do transactions with the card up to the available balance on the account.
This limit is also used to switch contactless "on" or "off" (by means of a limit override).
A proposed value of 500, 250 or 0 - depending on the limit profile and should be reset at midnight (00:00h).
The maximum amount of consecutive contactless "no CVM required" transactions done with a debit
or credit card.
The Cumulative card limit (so not a daily card limit!) is to mitigate the risk that when the card is stolen or lost, someone else can do "low value" transactions without the need to enter a PIN "forever".
There is a proposed value of 50 or 0 (depending on the limit profile).
In early , customer should be able to use their contactless payment card on:
There many different card type characteristics: