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Contactless Payments
"Contactless" payments allow people to transmit secure payment data to a point-of-sale (POS) terminal using devices such as contactless-enabled cards and mobile phones. With just a wave or tap, contactless payments can make transactions faster and more convenient for both the customer and the merchant.

The Need
Contactless payments are expected to be particularly popular when time is short or when it may be physically difficult to swipe a payment card in a payment terminal—for example, at drive-through restaurants, convenience stores and parking garages. For cardholders, it means not needing to carry cash or handing over their card to a shop clerk. For merchants, it means serving customers faster, providing greater convenience and lower costs for terminal maintenance.

How Contactless Payments Work
Cardholders can look for the contactless icon at merchant checkouts to know that contactless payments are accepted.

Generally then, the consumer waves or taps their card or device in front of the point-of-sale terminal. The reader receives the Visa payment information and then processes the transaction as any other standard magnetic stripe or chip card transaction. In the case of mobile phone contactless payments, the information can be imbedded inside the device or on an outer shell accessory.

A cardholder signature may or may not be necessary, depending on each market and participating merchants. Typically, transactions below a set amount, such as $25, do not require a signature, significantly speeding transaction times.

Transaction Security
Visa has very high security standards and risk management processes in place to protect all Visa transactions, and contactless payments are no exception. In addition to the same consumer and merchant protections offered on all Visa transactions, the contactless-enabled card or device never leaves the cardholders possession.

Visa Contactless Solutions in the Market
Various Visa regions have deployed contactless payment programs. In Asia Pacific, the Visa contactless solution was introduced in Malaysia and Taiwan. Visa Europe also demonstrated an offline EMV chip card-compliant contactless solution for low value transactions such as those in fast-food restaurants and convenience stores. In February 2005, Visa USA announced that it has developed a contactless payment platform and is ready to begin deployment in the U.S. market.

Contactless Payments: An Everyday Option
Contactless payments are expected to become widespread within the next few years, and Visa Member financial institutions worldwide are already showing strong interest. The service will be easy to implement because it does not impact the existing back-end infrastructure or processing systems used by merchants and Visa.

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