Contactless payments are simply payment transactions that require no physical contact between the consumer payment device and the physical point-of-sale (POS) terminal. In a contactless payment transaction, the consumer holds a contactless card, wearable or Near Field Communication (NFC)-enabled mobile device in close proximity (less than 2-4 inches) to the merchant POS terminal and the payment account information is communicated wirelessly (via radio frequency (RF)).
Contactless chip cards were first issued in the U.S. in 2004. Contactless payments using NFC-enabled mobile devices started with Google Wallet in 2011, followed by Softcard in 2012. The U.S. launch of Apple Pay, Android Pay and Samsung Pay in 2014 and 2015 reignited interest in contactless payments with NFC-enabled mobile devices. Both contactless chip cards and NFC-enabled mobile devices use ISO/IEC 14443-based technology, ensuring payment solution compatibility regardless of brand or payment device when used with contactless readers that have been approved by the payment networks.
Research shows that consumers, issuers and merchants benefit from the use of contactless payments. Consumers enjoy added convenience, speed and ease of use, while issuers and merchants enjoy faster transaction times, increased spending per transaction, lower operational costs and penetration into the cash payment market.
The Secure Technology Alliance Payments Council leads activities to promote contactless payments and provide resources for issuer and merchant education and implementation. Recent resources include:
- Contactless EMV Payments: Benefits for Consumers, Merchants and Issuers
- Contactless EMV Payments: Issuer Opportunities Webinar
- Contactless EMV Payments: Merchant Opportunities Webinar
- Contactless Payments in the U.S.: Guides for Merchants and Issuers
- Contactless Payments: Issuer Benefits and Considerations
- Contactless Payments: Merchant Benefits and Considerations
- Contactless Payments: Proposed Implementation Recommendations
- Contactless Payments Security Q&A
- Implementation Considerations for Contactless Payment-Enabled Wearables
- IoT and Payments: Current Market Landscape
The Alliance affiliated organization, the U.S. Payments Forum, has a Mobile and Contactless Payments Working Committee that works on cross-stakeholder implementation issues and publishes industry resources and best practices.
Additional resources on contactless payments can be found in the Alliance Knowledge Center.