How Contactless Payments Work

https://southbeachcapitaladvance.com/how-consumers-and-merchants-make-contactless-payments/

Contactless payments are a well-known consumer payment method that eliminates the need to swipe or insert cards or enter PINs. The process is fast and easy to use, and offers a great alternative to mobile or cash wallets. Businesses need to understand how the technology works, its advantages and how they can use it.

If a customer makes use of their contactless card, or eWallet to make a purchase, the device and terminal at the point of sale communicate using short-term radio waves. A cryptographic number will be transmitted and in the event that certain conditions are satisfied (e.g. the card has been authenticated, and funds are available), a transaction will be initiated by the merchant’s POS terminal.

After the transaction has been completed after the transaction has been completed, the POS terminal will notify the cardholder that their payment was accepted, usually with a green light, a checkmark or a beep. In some cases, the POS terminal might also require the cardholder to sign a signature before accepting the payment.

Apart from their convenience, contactless cards offer greater security than traditional magnetic stripe cards as the data is encoded on microchips. The information transmitted to a POS Terminal is encrypted. This makes it impossible for thieves and hackers to get the information.

In this way, contactless payment is a powerful tool for merchants of all sizes. With the right software, merchants can accept contactless payments through a credit card and online ACH on one platform which they can manage from their back-office accounting software with advanced plugins.