What are Contactless Payments?

What are Contactless Payments?

What are Contactless Payments?

If you’ve ever made an in-store purchase, you’ve probably heard of contactless payments. This relatively recent innovation in consumer technology has revolutionized how people make both in-store and online transactions. It started as an obscure payment method and is now considered the fastest and most convenient way to make purchases.

And it’s not limited to credit and debit cards – you can even pay using your smartphone, tablet, and smartwatch! But what are contactless payments, exactly? How do they work? And why is everyone using them?

Here’s what you need to know about the contactless payment revolution!

Contactless Payments, Tap to Pay, and Tap & Go

When it comes to defining contactless payments, it’s all in the name! Contactless payments are transactions that are made without your card coming into contact with a payment terminal or card reader. Contactless payments, also known as ‘Tap to pay’ or ‘Tap & go’, can also be made with your iPhone or Android phone, tablet, or iPad (granted your device is enabled with the right technology).

How They Work

The technology responsible for contactless payments is Near-Field Communication, a subset of Radio-Frequency Identification (RFID). RFID is a form of communication technology used everywhere- it’s the same system that operates your key card for your gym and tracks your luggage at the airport. The big difference between these technologies is that NFC is designed to work over very short distances.

NFC uses electromagnetic radio fields to transmit data between two devices. This information is transferred up to a distance of 1.5 inches. Of course, these devices need to meet certain specifications to be able to send and receive this info, which is why you can’t just use any credit card or phone on a contactless terminal. Your card or device needs to be NFC-enabled.

Contactless payment allows your credit card, debit card, phone, or any other NFC-enabled device to transfer your payment information through radio waves. When held close to an NFC-enabled terminal, or ‘tapped’ against the terminal, this information will be read by the payment terminal. This is how your payment is authorized.

Why is Demand for Contactless Payment Growing so Fast?

Contactless payments are on track to being the most popular purchasing method. And it’s spreading to online and in-app transactions too! But why is this technology soaring in popularity?

It’s simple – contactless payments are faster, easier, and more efficient than using cash, or traditional credit card payment methods. A Tap to pay transaction is 3 times faster than these older payment methods.

NFC-enabled POS terminals are also becoming more accessible around the world. For a while, this technology was only used by major companies. But today many smaller businesses are adapting to the new technology. Now you can find tap-to-pay options in many mom-and-pop stores, and this ease of access has made millions of people more accustomed to using this payment method without blinking an eye.

Not to mention, NFC contactless payment is one of the safest ways to make purchases. But we’ll cover the security aspects of this payment process in more detail below.

How Contactless Payments Have Evolved

Though it might feel like we’ve had contactless payments forever at this point, they only entered the public consciousness recently.

Contactless payments have been used as early as the 1990s, though employed using multiple different technologies (you can find more information on how NFC is being used around the world here). However, it was only in the 2010s that these payment processes entered common usage. Let’s jump into the evolution of contactless payment.

  • 1995 – The first use of contactless payments can be traced to Seoul, South Korea, where the city’s Bus Transport Association initiated the UPass system. It was a contactless way for commuters to pay for their bus passes.
  • 1996 – EMV standards are introduced, where a tiny computer chip is installed into credit cards: it is a new alternative to the magnetic strip and signature which had been the standard until that point.
  • 1997 – the US oil company Mobil set up the SpeedPass, a fob that could be used by their customers to pay for gas.
  • 2003 – The Oyster card system is introduced to the London Underground, where commuters can pay their fares with a contactless card.
  • 2007 – the Barclaycard becomes the first contactless card issued in the EU.
  • 2008 – Visa, American Express, and MasterCard begin offering cards with NFC_enabled contactless payment features.
  • 2011 – Mastercard Paypass and Visa Paywave are introduced. Google Wallet and Android Pay are also launched, with Android pay being NFC-enabled.
  • 2014 – Apple releases Apple Pay to a limited market.
  • 2015 – NFC-enabled terminals are implemented across the U.S. Contactless payment options spread to other devices, such as the Apple Watch.
  • 2019 – Major credit unions in the US begin offering NFC contactless payment credit cards.

If the trajectory of the tap-to-pay timeline is anything to go by, contactless payments will only continue to rise in popularity in the future.

Contactless Payments Options

Believe it or not, contactless payments aren’t limited to your credit or debit card. They are also accessible through digital wallets, where you make payments using your mobile phone. There are multiple digital wallets available, depending on the kind of phone you used.

Google Pay

Google Pay is a mobile service that lets Android phones, tablets, and watches make contactless payments without the use of a credit card. It was first developed in 2015 as Android Pay, then re-released as Google Pay in 2018. This service is supported by most major banks in almost 30 countries, and can be used to make purchases both in-store and online, and can be used for peer-to-peer money sending.

Apple Pay

This next digital wallet is, unsurprisingly, made for Apple devices. Apple users can use their phones to pay for in-store, online, and in-app purchases, and there is no spending limit for this digital wallet. Initially released in 2014, Apple Pay is supported by most major banks and is available in over 50 countries.

Samsung Pay

Samsung Pay was released in 2015, as a mobile payment service for users of Samsung mobile phones and other Samsung devices. It can also be used to make contactless in-store payments and authorized online purchases. Samsung Pay is not limited to NFC-based payments – it also employs magnetic secure transmissions (MST) which allow users to make payments with non-NFC-enabled payment terminals. This service is currently supported in 28 countries.


Many major banks are now offering contactless ATM services. This means that customers can use their cards and digital wallets to withdraw money without making contact with the ATM itself. Simply passing your card within an inch of the wireless symbol is enough to authenticate a transaction, allowing you to take money from your account.

Touch and Go Card Payments Versus digital wallets

But which is better? Are there more benefits to making contactless payments through your digital wallet than through your card?

The most obvious benefit to using a digital wallet over card payments is the convenience. If you’re a minimalist, it means one less thing to carry and potentially lose, which is an attractive prospect. With mobile phones, you only need to leave the house with your keys and phone. There’s no more digging around in your wallet or purse to find your credit card.

It’s also more secure. If a thief were to steal your NFC-enabled card, they could make multiple transactions with it before your card is disabled. However, if they were to steal your phone they would have to unlock it first, meaning they’d need access to your passcode, fingerprint, or face ID. As long as your phone is locked, contactless payments can’t be used.

However, the fact that you need to unlock your phone every time you want to make payments could undermine the instant-access nature of NFC that makes contactless payment so attractive.

Contactless Payment Benefits

No Infection Risk

Since the rise of the global pandemic, retailers and consumers have been looking into new ways to minimize contact and further reduce the risk of virus transmission. This new way of making purchases without actually touching a POS means you can safely enter stores and purchase goods without worrying too much about your environment.

This means you can go about your regular shopping schedules with little to no fear of infection. In the current climate, this is an invaluable benefit for retailers and shoppers alike.


By and large, contactless payments are the fastest of all payment methods. That includes the use of both cash and traditional credit and debit purchases. As mentioned above, contactless payments take your card as little as one-third of the time to process payment then it would swiping a magnetic stripe or inserting your EMV chip.


Contactless payments are one of the most secure payment methods you can use and have some of the lowest rates of fraud. Security measures around NFC-enabled payments have developed so fast as the technology has been introduced to the market, that the fraud rate for contactless payments between 2017 and 2018 declined by 33%!

Factors You Need to Consider

Tap to pay is a fantastically convenient method for making purchases, but that doesn’t mean it’s perfect. Here are a few things you should consider if you’re just getting acquainted with this new payment technology.

Card Limits

Many banks have historically had a low spending limit for their contactless cards, often as low as $30 to $40 per transaction. It can be frustrating for those of us who want the speed and convenience of contactless payments while making those larger purchases.

On the other hand, contactless payment limits are there for a reason. These limits are one of the basic ways that your bank or card provider can protect you from fraud. Think about it – if someone steals your card and tries to use it, they’ll be stuck making small purchases of $30 or $40. This will also give you more time to cancel your card and contact the issuer before they have spent significant amounts of money.

What if You Need to Use Your PIN?

Speaking of spending limits – if your card has a cap on how much you can spend per contactless transaction, you will usually be asked to enter your PIN which will allow you to spend above your card limit. For some, this is a significant drawback, as it undermines the nature of contactless payments.

Not only because it will take close to the same amount of time as using your EMV chip or magnetic strip, but because it means you’ll have to touch the payment terminal. This can make contactless payments seem less useful if you are trying to minimize contact with public surfaces during the pandemic.

Card Limits are Increasing

Since the beginning of the covid-19 pandemic, banks and credit card providers have begun to push through limit increases. This has made it safer, easier, and faster for people to do their shopping with contactless payments. This can both ease stress on businesses and retail workers, and potentially help to reduce virus transmission in public spaces.

The rise of coronavirus has prompted more than 50 countries to increase limits on contactless payments. The UK Treasury raised contactless payment limits from £30 to £45 in 2020, and £100 in 2021. But of course, this has also raised fears around fraud risk since higher limits will make it easier for thieves to steal large amounts of money using contactless payment.

POS Devices Need to be Equipped to Process Contactless Payments

Despite the growing popularity of Tap to pay, there are still many businesses that don’t offer this service. It can cost time and money to install NFC-enabled POS devices, and many stores will need time to catch up.

Don’t expect to be able to use contactless payments everywhere you go. In truth, if you want a single payment method that can be used anywhere, contactless payments probably aren’t your best bet. But this is likely to change in the future.

Security Under the Spotlight

When you’re using new technology, the first thing that you’ll want to consider is security. In today’s world, we constantly feel threatened by the idea of hackers and other cybersecurity threats. So how safe are contactless payments?

Contactless Payment Security

The first thing to remember about contactless payment? A transaction can only occur when the NFC-enabled device and payment terminal are within 1.5 inches of each other. This means that any potential ‘eavesdroppers’ have very little space to intercept the radio wave signals and collect any data that is being transferred.

And on the off-chance that they could intercept these NFC transmissions? Well, contactless payments are also secured by a unique, encrypted code. Every time a transaction is made with a card or digital wallet, your bank will send this unique code to the POS to authorize your payment.

But that little code doesn’t hold all of your payment details – only your bank account number is sent, and it doesn’t include your name or your card verification code. So even if someone could intercept your payment signal, they’d come up empty. This is a big part of why contactless is one of the most secure payment methods available.

NFC versus EMV

When it comes to security, NFC contactless payment is often compared to EMV. EMV stands for ‘Europay, Mastercard, and Visa’, and refers to credit cards that are fitted with a smart chip. These smart chips were designed to replace the traditional magnetic stripe on your card. The chip is where your data is stored so that your transactions can be processed by EMV-enabled terminals.

These days EMV is the standard for credit card processing across the globe. It is only recently that contactless payments with NFC technology have begun to challenge this, as more and more businesses have adapted to the demand for NFC-enabled terminals.

Both EMVs and NFC-enabled payments employ ‘dynamic authentication’, where a unique encrypted code is generated for every transaction. These codes cannot be replicated by potential fraudsters, and in general, it is much harder for payment information to be stolen from either card.

However, NFC is one step above EMV in terms of security, and that’s due to digital wallets. Since services like Apple Pay and Google Pay are entirely NFC-enabled, contactless payments can only be made when the user unlocks their phone or app using a passcode or biometric fingerprints. This is an important point to consider if you are choosing between making EMV or NFC payments.

Credit Fraud Compensation

Here’s one thing that should ease your mind if you’re unsure of using contactless payment. As this patent method becomes widely used, many major credit card providers (including Mastercard) are willing to reimburse their customers for any fraudulent transactions. So even if your card is stolen and purchases are made, you’re unlikely to lose that money in the end.

Digital ID and Biometrics

In the last few years, attention has been raised about the need for digital ID as a comprehensive way to authenticate contactless payments. This will take contactless payment security one step further, ensuring that everyone who wants to use Tap to pay will feel 100% safe and secure in the process.

At the Money2020 Europe conference in 2019, it was unanimously agreed that a functioning digital ID system would be needed to spur on the world’s move to contactless payment. Though it’s unclear what form this ID system will take, the aim is to make it as simple and easy to use as possible, so as not to stall the process of making payments.

The concept of fingerprint biometrics being used to authenticate contactless payments has also been suggested. Tap to pay users might be seeing new cards available that are installed with biometric sensors, similar to the ones used to unlock smartphones. Though these ideas haven’t been incorporated yet, the future is looking bright for contactless payment security.

A Personal Guide to Making Cashless Payments

If you’ve never used a card or phone that has contactless payments enabled, there are a few simple things you need to know first.

Look for the Wireless Symbol

So you know the WiFi symbol that you use when you’re looking for an internet connection? That same symbol can be found on the corners of credit and debit cards that are NFC-enabled, with the “curves” of the symbol stacked horizontally rather than vertically.

If you have never used contactless payments before, you may already have an NFC-enabled card. Just look out for the wireless symbol on your card! If it’s there, you should be able to use it on tap-to-pay terminals. Otherwise, you can get in touch with your bank or card company issuer to ensure that this feature is activated on your card.

This also applies to NFC-enabled POS terminals. You might be wondering – so where I can use contactless payments? If you’re unsure of whether Tap to pay is available in your local stores, just look for that wireless symbol on any given terminal.

Make Sure Your Phone or Wearable Device is NFC-enabled

Now you know how to identify if your card can make these payments, what about your phone? You can only use Tap to pay if your iPhone or smartphone is NFC-enabled. To do this, you can search your settings for ‘NFC’. If there is no ‘NFC’ option, your phone likely cannot make payments.

You can also check with your mobile company to see which models are eligible to use Google Pay, Apple Pay, or Samsung Pay. Often their older models are not NFC-enabled.

How to Load Your Card Onto your Payment-enabled Phone or Device

To turn your phone or device into a digital wallet, make sure you’ve installed the correct payment service onto your phone. This will likely be an app for Google, Apple, or Samsung Pay. With an iPhone, you can find Apple Pay in the Wallet app.

If using your phone or tablet, you should be asked to take a photo of your credit or debit card. This will allow the app to scan your card details and store them in the app. You then need to annually save your payment details. If you have a smartwatch or Apple watch paired with your device, you should be able to automatically add those card details to your watch.

How To Use Apple Pay

How To Use Google Pay

How To Use Samsung Pay

Final Thoughts

It’s clear to see that contactless payments are taking over in the payment sphere. This is particularly true as the global Covid-19 pandemic drives customers and retailers to find safer ways to buy and sell in the marketplace.

This new way to spend money without having to count your change, sign a slip of paper, or punch in your PIN has become the go-to method for millions. It’s faster, safer, and easier than almost all the alternatives. And it even allows you to make payments through your phone or smartwatch!

And as modern shoppers reach for more convenient ways to spend their money, one thing is clear – contactless payment won’t be going anywhere.

What is tap to pay?

What Is Tap to Pay?

What Is Tap to Pay ?

What is the most convenient way to pay for a purchase? Most of us don’t think about how we pay for what we buy. But if we asked you this question, your answer would probably be – Visa Tap to Pay!

Tap to Pay is the process that occurs when tapping a credit card or mobile phone against a payment terminal. Just a wave of your card and behold!! Your payment has gone through.

Visa Tap to Pay has become the go-to way to make in-store payments over the last few years. It’s a super-fast, no-fuss method for paying for your goods and services! All without the hassle of inserting a card, punching in the PIN, and waiting for your transaction to process. And the technology behind it could change modern living beyond just streamlining in-store purchases.

But just what is Visa Tap to Pay? And how does it work? Today we’re going to cover the ins and outs of contactless card and mobile payments, and why we think it’s the future of all electronic payment methods.

What is Near Field Communication?

Visa Tap to Pay, Tap and Pay, or simply ‘tap,’ are just a couple of different names for contactless payments. But the technology behind every kind of contactless payment can be summed up in one name: Near-Field Communication (NFC). NFC is a wireless technology that allows different types of electronic devices to exchange data and information over a short range, usually 4cm (1.6 inches) or lower.

NFC-enabled devices can communicate with each other simply by touching each other physically (tapping) or passing by one another within about an inch or so. This prompts a transaction between the NFC chips or tags installed in both devices. This is how payments can be made between a terminal and your card or cell phone. That’s right – if you use Google or Apple Pay to pay by phone, then you’re already familiar with NFC tech.

Despite how NFC has streamlined these everyday processes, it isn’t as cutting-edge as it sounds. It’s very similar to other wireless radio communications systems such as WiFi and Bluetooth. And in fact, it’s extremely similar to radio-frequency identification (RFID), where smart tags and chips are used to send encrypted data to a “reader,” or active device.

Think of the ID badges and keys people often use to enter their workplace or gym. These are RFID-enabled tags, and their activity is “data” that can be logged and stored in a system. NFC works similarly.

The History of NFC

The starting point for NFC was RFID, which operates on the same principle of short-wave wireless communications, though it has a much shorter range. In 2002, tech giants Phillips and Sony joined forces and announced their technical outline for NFC.

Over the next two years, various manufacturers began to take an interest in this new technology, and in 2004 the Near Field Communication Forum was established. This was a nonprofit organization heralded by Sony, Phillips, and Nokia, as a platform to bring awareness of NFC to the public.

By 2006 the structure of NFC technology had been fully outlined, and interested parties began to take notice. A year later the world’s first NFC-enabled mobile phone was on the market courtesy of Nokia, and over the next few years, 100s of projects utilizing NFC were being greenlit around the world. This included NFC-enabled mobile wallets such as Android Pay and Google Wallet. 

By 2015, thousands of merchants across America had switched to NFC-enabled software and payment terminals. This signaled the birth of contactless payments as a mainstream service. Many around the country were asking “what is Tap to Pay?” And their questions were about to be answered

Today, virtually no one is asking “what is Tap to Pay”! Cards everywhere have their own NFC chip, and Tap to pay is an option for everyone. And since then, NFC technology has been adapted for other sectors. Let us explain…

It’s More Than Just Tap to Pay

NFC is best known today as the function that allows us to make convenient contactless payments, but there is a huge variety of important uses for this technology outside of consumer and retailer transactions. These include: 

  •   Airline Boarding Passes: As early as 2014, major airlines in Japan and France have allowed their passengers to use NFC-enabled devices as a replacement for boarding passes. This has been shown to significantly reduce the time it takes to board a full commercial flight, compared to scanning paper boarding passes.
  •   Public Transport: Currently, the primary use for NFC technology is public transport access. Many countries including the US, Canada, China, and many European countries use NFC chips as a substitute for paper bus and train tickets. Passengers can simply ‘scan on’ with a wave of their mobile phone against a ticket terminal!
  •   Hospitality Sector: NFC has also made a breakthrough in the hospitality and hotel industry, as hotels can manage how their customers access rooms and facilities without keys or key cards. Some hotels have opted for wristbands, badges, key chains, and more. One hotel in the Bahamas, The Cove, even created a temporary tattoo embedded with an NFC chip!
  •   HVAC: Some companies that manufacture heating, ventilation, and air-conditioning technology (HVAC), have incorporated NFC to streamline the process of installing and configuring their equipment. By moving the user interface from the usual LED/LCDs with a keypad to an app on a smartphone, it becomes easier and more intuitive for customers to use their products.

These are just some of the many uses that NFC has, but much more is possible. Only the future can prove whether or not this technology will meet its full potential.

How Does NFC Work?

Near-Field Communication uses electromagnetic radio fields to transfer information between targeted devices, or one primary device and an NFC tag. The radiofrequency current is generated by the active device (also known as a reader or interrogator) that can set up contact between itself and the target NFC-enabled device or tag.

NFC is an evolved version of the radio-frequency identification (RFID) system and acts very similarly to this technology. When two devices have an NFC chip, the active device will activate the second device’s chip so it can collect small and specific data. This is what occurs when any NFC-enabled terminal interacts with your credit and debit card, and device.

This system is incredibly simple to use, which is part and parcel of why it’s become so popular. And unlike Bluetooth and Wireless connections, there is no need for passwords, PINs, or device discovery. You simply bring your NFC-enabled device into that 4cm range, and the information will be transferred in milliseconds!

But not all NFC interactions are equal – naturally, any financial transaction needs extra levels of security. Every time a transaction is made with your credit card or mobile phone, their NFC chips will create an encrypted code with limited payment information. This code can only be used by your bank, and a unique code is created for every individual transaction.

Cool Things You Can Do With NFC

Many people don’t realize that NFC tags can be bought, programmed, and used by anyone who wants to harness the potential of Near-Field Communication. These smart, circular tags can be easily purchased online and used to automate your everyday processes. 

To do this you will need:

  • A smartphone with NFC capabilities
  • Your chosen NFC tags
  • An NFC tag writer app. Many different tag writers exist and can be found through the Google and Apple store, such as NFC/RF Reader and Writer and NFC TagWriter by NXP. Both are simple, easy to navigate, and can write code for a variety of tags.

NFC Tag Types

Speaking of tag varieties, there isn’t one standard NFC tag – there are multiple! Some are simple and inexpensive but have less useful functions. Others are more sophisticated in their uses but more expensive to purchase. We recommend something in the middle that has enough functionality to perform most basic tasks but won’t break the bank either. Click here for more information on NFC tag types.

What You Can Do

Here are some simple but awesome ways you can utilize the same technology that Tap to Pay uses, but for your everyday tasks.

  •   A Better Alarm: We’ve all been there before – your phone alarm goes off, so you smash that snooze button and go straight back to sleep. Luckily, there are phone apps you can use to link an NFC tag with your phone alarm. Simply place your tag on an object on the other side of the room.

Setting up your alarm this way means you need to leave your bed to wave your phone over the tag and deactivate the alarm. By the time you’ve done it, you’re already up and moving.

  •   Set Up Phone Shortcuts: Simple tasks like opening your phone camera, calling a friend or family member, and launching a streaming service or music app can be done instantly with an NFC tag.
  •   Connect To WiFi Instantly: By writing your WiFi password onto an NFC tag, anyone can tap their phone against your tag and instantly gain access to your WiFi network. This is an unbeatable timesaver for you and your visitors, especially if you have a particularly cumbersome password.
  •   Business Cards: If you’re a business owner, NFC-enabled business cards should be in your future. With a simple tap of their phone, your potential customers can get instant access to all of your business information in seconds.

These are just a few of the ways that Tap to Pay technology can be used to automate your everyday actions, saving you time and energy. But there are endless opportunities for harnessing the power of NFC, you just need to look for them! For example, this video has even more creative ways to use NFC tags for home automation:

Why You Should Use Tap to Pay

When it comes to Tap to Pay, you may be wondering why you should use it over other electronic payment methods. There are a few fantastic features that make the Tap to Pay function the likeliest method for spending in the future. And there are many benefits for both the customer and retailer.

It’s Faster

The speed of Tap to Pay is undeniable, and something worth considering in the fast-paced urban environments many of us live in. Time is money, and Tap to Pay is the fastest payment method on the market. Outdated chip readers lag so much that they just can’t compare.

Not to mention if you’re using Google Pay or Apple Pay on your NFC-enabled mobile phone, you won’t waste time digging through your wallet looking for your cards. It’s as simple as pulling your phone from your pocket and waving it over the payment terminal.

It’s the fastest and easiest way to make a purchase, and the other customers waiting in line will thank you for it.

It Won’t Wear Out Your Magnetic Strip

Remember those magnetic strips on the back of your credit and debit cards? Those strips hold all of your card’s details, and they’re the reason you’re able to make transactions in the first place. The more you swipe and insert your card, the more worn out that strip will get over time.

Tap to Pay solves this problem because you never have to use that magnetic strip. You only need to use it with retailers and merchants who don’t offer Tap to Pay technology. With Tap to Pay, your credit and debit cards might survive to their expiration date!

It’s Readily Available

A few years ago Tap to Pay was only available at a limited number of stores. People were still adjusting to the novelty of it and had few opportunities to use it. But these days, Tap to Pay can be found virtually everywhere. Whether you’re visiting the supermarket or a small mom-and-pop convenience store, Tap to Pay is ubiquitous in many countries.

Less Contact in Public

 It’s obvious that contactless payments require “less contact,” but in the current climate this simple fact takes on more important meaning. In the time of Covid-19, many people are wanting to reduce the amount of physical contact they’re making with the outside world, particularly in public spaces.

With Tap to Pay, you can go out into the world and make virtually any payment without having to touch a payment terminal. The fewer public surfaces you need to touch, the more at ease you can be during these tumultuous times.

In fact, since the spread of Covid-19 in 2020, several banks have begun raising the withdrawal limit for contactless payments to help limit contact-based transactions in stores. In the UK for example, contactless payment limits are set to increase from £45 to £100 as of October 15, 2020.

Online Purchases Are Easier Too

If you have an NFC-enabled mobile phone then your online payments are about to get easier! Both Apple Pay and Google Pay have made it so their users can harness NFC to make purchases online and in certain apps. By simply using an encrypted number tied to your account, you can make online payments without having to scramble for your credit card or wrack your brains for old passwords.

Is Tap to Pay More Secure Than Other Payment Methods?

When you think about your payment information being transferred through the air into other devices, it can set off alarm bells. After all, cybersecurity threats seem to advance at the same rate as the technology they attack – what’s to stop someone from intercepting your information? Let’s look into the security side of Tap to Pay technology.

Your Bank Details Aren’t There

Thankfully, having your bank details stolen isn’t a real issue with Tap to Pay. As we mentioned, your account number is sent between two devices and is encrypted with a unique code that only the active device will be able to read.

Not to mention, only your account number is sent – not your billing address and card verification code. Even if a “hacker” could somehow intercept the Tap to Pay transmission AND encode the transaction, most of your bank details simply wouldn’t be accessible.

Safer Than Swipe or Insert Methods


Using Tap to Pay is generally more secure than using the traditional swipe or insert method. Take the magnetic strip on the top half of your credit card – this little strip of ferric oxide is encoded with all your ID information. And hackers have developed devices known as “skimmers,” devices that can be implanted into ATMs or POS (Point of sale) devices, the ones you swipe your card through to make payments.

Once your card is swiped or inserted into the machine, the skimmer device can then retrieve ALL of the information stored on your card in that tiny magnetic strip. That includes the credit card account number, expiration date, and your full name. And once they have that information they can use it anyway they please.

This is something you never have to worry about with Tap to Pay transactions because the encrypted code that is transmitted via radio waves cannot be read by a skimmer or any similar device. And because ATMs all over the world are starting to incorporate NFC technology in their transactions, you’ll be able to withdraw cash without fear of having your details stolen by hackers.

Don’t Lose It

 Tap to Pay is a reliable and secure way of making payments with your debit card, credit card, and mobile phone. But like any transactional technology, it isn’t fool-proof. The one clear flaw in Tap to Pay is that your money is up for grabs if you lose your card since it doesn’t require a PIN or signature to make payments. This can put you in a vulnerable position if your card is stolen or you lose it.

It isn’t as much of an issue with Google Pay or Apple Pay, since both employ an automatic lock screen that needs to be unlocked before these systems can be used. But if a thief can somehow unlock this screen, they will then be able to use your phone to make payments.

Neither of these situations is the end of the world. If your card goes missing it’s simple enough to cancel it once you realize it, making the card useless to any would-be thieves who want to spend your money. Not to mention, many credit card companies will reimburse customers for any purchases made through fraudulent transactions. That way, even if you do lose money before canceling your card, it will likely be returned.

All in all, when it comes to payment security, NFC is a great alternative. It’s not foolproof (no method is), but it’s certainly a step forward for the safety of electronic payments.

Final Thoughts

It’s undeniable that Tap to Pay is fast becoming one of the most popular ways to make purchases all over the world. And it’s not hard to see why – it’s faster, more efficient, more convenient, more secure, and the ideal way to make safe in-person payments in a post-Covid world.

After all, what is Tap to Pay if not a more advanced way of making purchases? There’s a reason most major retailers are implementing this technology. And Near-Field Communication isn’t going anywhere! You can expect to see more sectors picking up this simple and useful technology to streamline products, services, and industry procedures in years to come.

It’s safe to say that Tap to Pay, and NFC technology in general, is the way of the future. Before reading this article you might have wondered why you should use Tap to Pay at all? But the better question would be… why not?

Cash: the enemy of financial inclusion

Cash: the enemy of financial inclusion

Cash: the enemy of financial inclusion

Micro merchants and SMEs are the backbones of the world economy. They are the world’s largest employers and process trillions of dollars a year in payments. However, even in markets where most consumers have cards, they are largely cash-dependent. This is impractical, inefficient, and comes at a high societal cost. Luckily it might be about to change…

The current pandemic has accelerated the world’s progress towards a fully digital economy. But while all goods and services that are bought and sold online are paid for using digital payment methods, a vast majority of transactions in the physical world are still cash-based.

Transaction in cash occurs either because the payer does not have a card or digital payment method, or because the vendor does not have the means to accept such payments, or both.

Payments: supply and demand

Assuming that any consumer who has cards or digital payment options prefers using these over cash, and assuming all merchants in that market accept cards, we would expect the majority of card transactions in that market to be correlated to the number of people that have cards. So far so good.

Now let us use the number of cards per capita in a market as a proxy for the number of people who have card payment as an option, and use this is as the “demand” side for paying by card. On the “supply” side we have the number of merchants able to accept digital/card payments. If we subsequently look at the percentage of transactions in cash, we can see how well the supply side is able to meet the demand.

In Sweden for example, the number of cards per capita is 2.21. Meaning that the average meatball-loving Swede has two cards or more digital payment options available at any given time. As you would expect the transaction in Sweden are mostly card-based (over 87% card to under 13% cash)

In Afghanistan by contrast, the number of cards per capita is 0.01, meaning only one in one hundred adults have a card. As a consequence, virtually 100% of transactions are in cash.

Cards per capita in Afghanistan

Although these two countries represent polar opposites on the supply/demand card-payment spectrum, both markets have demand/supply equilibrium. In Sweden a high demand for card payments = low cash transactions, and in Afghanistan a low demand for card payments = high cash transactions. Surprisingly, this is rare.

Most markets have a supply/demand gap. Croatia for example is a country where the average citizen has more cards payment options than the Swedes (2,6 cards per capita), 73% of transactions are in cash, and only 17% of transactions are digital or by card!

In fact, cash is still a more common form of payment than a card in most European countries, although card issuance rates are high, and the unbanked population is virtually 0.

In South Africa, (where the government has mandated that all salary payments be made via bank transfer in a laudable effort to increase financial inclusion) the supply-demand gap is even bigger. Despite the average citizen having 4 (FOUR!!!) cards payment options available, 96% of transactions are in cash..!

So why (mid-pandemic) are we still so cash-dependent? Because many vendors still don’t accept cards.

Why vendors still don’t accept card payments

To accept card payments, a merchant must apply to enroll in a scheme, go through a vetting process, fill in forms, and wait anywhere from 3 days to 2 weeks to get their card reader sent to them. The device requires set-up, integration, and maintenance. Not to mention that a new entry-level card reader costs in excess of 30 Euro per device, and often come with leasing/down-payment plans that make them even more expensive.

By contrast, accepting cash only requires a till and someone trustworthy to look after it. Cash is just easier.

The big retailers, chains, and conglomerates will take any form of payment: McDonalds, Carrefour, and the other major players will be happy to accept your bank card whether you are in Norway or Uruguay. For the big players, the small burden of getting card readers is easily outweighed by the benefit of higher revenue.

But for the local hair salon, kebab-shop or café, it is another story. Micro businesses are cost-sensitive, liquidity-focused, and operate on short cost/revenue cycles.

Sustaining the expenditure on hardware, overcoming the obstacles and technical complexities to enroll, and having to wait several days for a transaction to be available on their account, are barriers to entry. These are simply too high for many micro-merchants to overcome. This makes them more likely to just operate in cash, and less likely to have bank records or data necessary for access to credit.

This is a massive issue. SMEs and micro-merchants make up the backbone of the world economy. According to the World Trade Organization, small-and medium-sized enterprises (SMEs) represent over 90 percent of the business population, 60-70% of employment, and 55% of GDP in developed economies. Despite being such a big part of the economy, this segment is struggling to grow. According to the world bank, access to finance is the main constraint.

Small businesses are less likely to be able to obtain bank loans than large firms. As a consequence, they have to rely on internal funds. The International Finance Corporation (IFC) estimates that 65 million firms, or 40% of formal micro, small and medium enterprises in developing countries, have an unmet financing need of $5.2 trillion every year!

IFC research

It is imperative to improve SMEs’ access to finance and find innovative solutions to unlock sources of capital, not only to support these small businesses, but because this situation disproportionally affects the developing world, and women. Women-owned SMEs are hugely valuable contributors the society, not only do they foster increased gender equality, they also grow overall wealth in the economy. However, female entrepreneurs face a range of financial and non-financial challenges in realizing their growth potential, and are more likely than their male counterparts to cite access to finance as a major or severe constraint on their business operations. One of the biggest barriers for increased access to finance for women-owned enterprises is the lack of reliable data disaggregated by gender. The credit gap for formal women-owned SMEs across all regions is roughly $2872 billion, which is 30 percent of the total credit gap for SMEs.

I have previously written about e-wallets and the importance of credit access and financial inclusion, on an individual level, but this is equally important on a small-business level.

Access to financial services enables the poorest and most vulnerable in society to step out of poverty and reduces the inequality in society.

Small businesses and micro-merchants that operate in cash, will have difficulty getting access to credit, they will more likely remain liquidity squeezed, and they are less likely to succeed or scale.

Again, this is a serious concern for women-owned SMEs, where most of the financial and non-financial barriers affecting occur at the startup stage of the business life cycle.


How merchants will go digital

That is where we come in, having developed a solution that allows any merchant to accept contactless cards or any digital payments (Google Pay, Samsung Pay, and Apple pay, etc.) Instead of relying on hardware, we have a software-based point of sales system (SoftPOS), that transforms ordinary smartphones into a contactless payment point. The low cost and high worldwide penetration of smartphones mean any merchant with a phone can now download our app and have a card reader. This gives merchants a quick, barrier-free ability to accept card payments directly on their phones, without the cost or logistical challenges of hardware. Reducing their reliance on cash, increasing their revenue, and removing the operational hassles and risks associated with cash operations. It also simplifies credit agencies’ and banks’ ability to evaluate their creditworthiness and facilitates their access to loans!


SoftPOS is an awesome technology. For mature western markets, it gives merchants an opportunity to take payments more easily, to scale faster, and to reduce reliance on cash and invoicing, as they can accept payments on the go (electricians, plumbers, delivery drivers, etc.)

But for the emerging markets and the developing world, SoftPOS technology is a powerful enabler and gateway to increased financial inclusion and access to capital.

MeaPay is proud to deliver SoftPOS and work hard to push for the democratization of payments and increased financial inclusion.

Bring on the future, and let cash rest in peace.

Christoffer MeaPay

Learn more about us or join the team.