As per RBI’s report, in the financial year 2017-2018, around Rs.1373 lakh crore was digitally transacted. The strong figure suggests that more individuals are now inclined towards digital transactions and are opting for a contactless credit card.
To elaborate, such credit cards use contactless technology called Near Field Communication or NFC and is deemed to be a secure method of payment. These cards are often known as RFID chip credit cards and as they come with an RFID antenna and a contactless NFC chip. Further, it eliminates the need to swipe or enter credit card pin as it uses one-time code and radiofrequency to complete a transaction.
Regardless, card users must figure out the way it works and the benefits it comes with to make the most of it during transactions.
How does a contactless credit card work?
The embedded chip and radio frequency antenna facilitates the functioning of a contactless credit card. Consequently, when such cards are tapped against a contactless payment terminal, the payment details are transmitted wirelessly.
Additionally, the credit card users’ account details are communicated and processed with an acceptance network’s help. This means users do not have to enter their details manually to complete their transaction.
Benefits of contactless credit cards
Benefits of these credit cards make them a viable option to complete transactions effectively.
Here are some of the major benefits of such credit card –
- Fast – When compared to the cards with EMV chips, transactions made through a contactless credit card is faster and less cumbersome. This is a vital feature that not only helps save time but also extends greater convenience.
- Secure – The fact that users’ card stays in their hand the entire time minimizes the room for any credit card fraud, skimming or misuse. Additionally, when the user exceeds the card’s credit limit, they are required to provide their PIN as a safety measure. Hence, giving the customers more control and a sense of greater security. Therefore, using these is one of the ways to protect your credit card from being hacked.
- Ease of use – By eliminating the need to swipe, sign or enter card pin code at PoS to complete transactions, the card has made the entire process quite easy to follow. Further, individuals make payments via a contactless credit card through any contactless payment-enabled PoS.
Additionally, it is to be noted that such cards are deemed more suitable for smaller purchases. For example, credit card holders can use these at fuel pumps, to pay for meals at restaurants or convenience stores.
However, if users wish to maximize the benefits they derive through their contactless credit card, they should opt for cards like Bajaj Finserv RBL Bank SuperCard.
NBFCs like Bajaj Finserv extend exclusive benefits and special privileges to their card users to help them maximise the significantly.
Also, make it a point to learn all you need to know about the SuperCard before applying for it.
Applicable rules and regulations
Certain credit card rules and regulations apply to contactless credit cards to help minimize the risk of fraudulent practices and enhance the customer experience.
A few of them are mentioned below –
- Users do not need to provide an authentication PIN for transactions up to Rs.2000.
- RBI has offered NBFCs the freedom to set the interval between such transactions.
- It is the responsibility of NBFCs to inform the users how to use such cards, what are its benefits and the risk involved.
Additionally, users must make it a point to learn about the same from their financing institution while chose a credit card and also to use the credit card wisely. Further, in the event of losing the card, they should report the incident to them at the earliest.
Conclusively, a contactless credit card is an instant payment instrument that lowers the time taken to make payments significantly. These cards are exceptionally beneficial for those who make transactions at PoS frequently.