{"id":168293,"date":"2023-04-28T06:00:00","date_gmt":"2023-04-28T11:00:00","guid":{"rendered":"https:\/\/www.ict-pulse.com\/?p=168293"},"modified":"2023-04-28T06:27:46","modified_gmt":"2023-04-28T11:27:46","slug":"contactless-credit-card-payments-pros-cons-and-what-else-you-need-to-know","status":"publish","type":"post","link":"https:\/\/ict-pulse.com\/2023\/04\/contactless-credit-card-payments-pros-cons-and-what-else-you-need-to-know\/","title":{"rendered":"Contactless credit card payments:\u00a0 Pros, cons and what else you need to know"},"content":{"rendered":"\n

Contactless credit card payment is slowly being rolled out across the Caribbean region. To some, it is a much-welcomed convenience, to others, a source of concern. In this article, we provide a quick primer on this development in the region\u2019s banking space, including some of the perceived benefits and drawbacks.<\/em><\/p>\n\n\n\n

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To a considerable degree and across the Caribbean region, we have been slow to introduce some of the latest digital developments in the banking and financial services space. As we learned in our conversation with Wendy Delmar, Chief Executive Officer of the Caribbean Association of Banks<\/a>, Caribbean banks tend to be risk-averse, and to varying degrees, struggle with the cost versus benefits of introducing new facilities and services, based on the perceived needs of their customers.<\/p>\n\n\n\n

As it relates to e-commerce and digital payments, the region has lagged behind developed countries in accepting credit cards, and more recently, in credit card technology. It is perhaps only within the last five years that credit cards with microchips have become standard issue. These microchips, like the magnetic strip on the reverse side of credit cards, store data such as credit card account number, cardholder\u2019s name, card expiration date, and card verification code. However, the microchip also generates a unique transaction code, thus allowing for the authentication, authorisation, and successful processing of transactions whilst making them more secure. Typically, in the Caribbean region, chip-based transactions require the cardholder to enter a PIN (Personal Identification Number) to confirm payment.<\/p>\n\n\n\n

However, within the last year to 18 months, tap-to-pay or contactless credit cards have been introduced. Although contactless payment has been around since the 1990s, contactless credit cards began to gain traction in more developed regions in the mid-to-late 2000s. However, the COVID-19 pandemic would have accelerated its implementation in developing countries, in particular, as people became more aware of the need to limit physical contact and being in close proximity to others.<\/p>\n\n\n\n

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So what is the technology behind contactless cards?<\/h2>\n\n\n\n

The technology behind contactless cards is near-field communication (NFC). NFC has been around for about 20 years, and is a technology that allows wireless two-way communication between NFC-enable devices by either touching or bringing them into close proximity (a few centimetres) of each other.<\/p>\n\n\n\n

In addition to credit cards, NFC has a broad range of applications including,<\/p>\n\n\n\n

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  • keyless access, to vehicles, buildings, car parks, etc.<\/li>\n\n\n\n
  • e-wallets for payments made with a smartphone, such as for buses, taxis, groceries, concert tickets, etc.<\/li>\n\n\n\n
  • theft control, via the RFID\/smart tags that can be placed in bags and luggage<\/li>\n\n\n\n
  • manufacturing and inventory management, where smart tags can be used to identify each product from its different process stages, or to help businesses more efficiently manage their inventory<\/li>\n<\/ul>\n\n\n\n

    However, it is emphasised that the application of NFC is growing. In the future, it could become integral to smart homes, the Internet of Things and 5G-enabled devices and applications.<\/p>\n\n\n\n

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    What are some of the pros and cons of contactless cards?<\/h2>\n\n\n\n

    Recently, there have been reports in the international press of contactless credit card charges being made even when customers have not had their credit cards close to NFC-enabled payment terminals. In some instances, multiple cards were charged, charges were made to credit or debit cards customers had not intended to use, etc.<\/p>\n\n\n\n

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