Just like a traditional electronic transaction, there are four parties involved:
- The merchant sets the total purchase amount on the terminal and the customer presents their card.
- The card information is sent to the card-issuing bank. If the information is valid, payment is approved and the second part of the process begins.
- Next, the money is transferred in the opposite direction, from the bank, through the acquirer, and to the merchant’s bank account.
- When the merchant receives payment, the process is complete.
The way the transaction data is sent depends on the type of contactless payment:
1 | Contactless bank cards Credit or Debit Cards
waves. The card also has an antenna in the plastic designed to secure the connection with a card
reader. The technology at play here is called near field communication, or NFC for short.
2 | Smartphones & Wearables (eWallets)
Once the NFC chip is held within close proximity of a reader, it begins a wireless data transfer. These devices usually require biometric authentication (such as fingerprint scan or facial recognition) to authorise the payment – but also an on-screen PIN can be requested for security.
3 | QR Code (Payment Apps)
Although not as popular as cards or NFC-equipped devices, QR (quick response) codes are still a viable option for accepting contactless payments. QR codes store hundreds of times more information than traditional vertical barcodes and can be scanned both from screens and printouts.
Most smartphones using the latest software can scan QR codes from directly within the main camera app, meaning there’s no need for third-party apps. Your customer would simply open the camera, point it at the code, and follow the instructions on their device to complete the transaction.