What is a Contactless Reader for Credit Cards and How Does it Work?

The latest technology in credit card readers are totally hands off and non-touch. Known as a contactless reader, when scanning cards it does not even need to touch the plastic in order to read the information due to a chip embedded inside. The contactless reader uses radio waves in order to read and write data on the credit card through the chip. These readers have been on the market since about 2005 in the US where they were first introduced.

All of the major credit card companies have a contactless reader on the market. Some you may recognize are the PayPass from MasterCard and ExpressPay from American Express. In addition to reading credit cards with chips installed in them, they are also able to read key fobs and other devices in which chips are installed. They work with both credit and debit cards and there is no signature or PIN required if the transaction is less than $25.

Security is always a concern when any credit card transactions go through and a contactless reader is no exception. These readers use the same security networks as all normal credit card transactions and they are just as safe as they travel through the system. You can only make purchases up to $100 using a contactless reader and it can only be used a certain number of times in a set period of time before you have to use your pin. This eliminates any major purchases if a chip card or fob is misplaced and of course, a stranger would be unable to use it if they did not know your PIN. These transactions are additionally protected by all of the same fraud and credit card theft laws as any other credit card transaction.

The only difference between using a contactless reader in your store and a regular credit card swipe machine is how the information is entered into the system. Once the information is there, the process is exactly the same as any other credit card transaction. Simply, instead of your bank information or credit card account information being embedded on a magnetic strip, it is embedded into a very small microchip. The microchip is only about a millimeter and thinner than the plastic of the card. In the future, it is possible that these chips could even be implanted in a human hand and financial transactions could be done by a wave of your own hand instead of via credit card or chip card.

 With the benefits and convenience of a contactless reader in your store you may find that you have happier customers who are content to come in and out in a flash. You may also find that you have many brand new customers who are coming into your store simply for the added convenience that this type of credit card reader gives them. We live in a fast paced world and for many people, the quicker they can get things done, the happier and more content they are. Shopping in your store should be no different