Contactless payments are used as a method to pay for purchases. They work the same way credit and debit cards do but the physical card isn't needed. Contactless payments are also called "cardless" or "tap and go" transactions.


Contactless payments work by using a wireless technology known as radio-frequency identification or RFID. It's a simple tap of a smartphone on a payment reader to complete the transaction. It's common to find contactless payments inside most retail outlets and restaurants. But they are growing in popularity.

Mobile technology has boosted the use of contacless payments in more locations throughout the world. The rapid increase in the use of digital wallet apps is another reason contactless payments has become more profound.


How the Technology Works

With tap to phone technology, an Android or iOS smartphone or tablet can be transformed into a POS terminal. This makes contactless payments an option for any location.

The merchant downloads an app and sets-up a bank within the app to accept payments. Customers can then tap their smartphone or smartwatch over the console to pay for their transaction. Unique security codes keep customer information safe and protected from fraud or identity theft.

Contactless payments have grown in popularity due largely because of the ease of use for customers. Companies creating the contactless payment processes and the businesses that use them have made it a convenient payment option. Simply tap the card against the reader.

An example of the contactless payment system's growth in popularity is in the New York MTA. All 62 Metro North stations now employ contactless cards as a way to pay. The old method only allowed for contactless cards on the subway but now there are more options.

An article from The Economist discusses the popularity of contactless payments. In the United States alone the value of contactless transactions saw a 40% increase in 2015 to $12.2 billion from $10 billion in the previous year.

Having an option of not needing to enter a four digit PIN or password is a convenience that supports the boon of contactless payments. A good example of the contactless payments system being used is the Oyster card in the London Underground. This contactless system is a ticketing option that is used to travel around the city.

Apple Pay is a version of the contactless payment system specifically used over the iPhone. The app supports all major credit cards and debit cards.


Apple Inc. developed the mobile payment called Apple Pay as a contacless method of paying for goods and services. This digital wallet is used by tapping an iPhone or Apple Watch to a point-of-sale (POS) device.

Google Pay is a contactless payment method used on Android phones through select carriers. The service is a way to shop on the go in a secure and convenient way. Google pay also lets users store items in the digital wallet such as tickets, credit, debit, gift or loyalty cards. If a user doesn't have a compatible phone they can order a physical card to use Google Pay.

Samsung Pay is not as well known as Apple or Google but it is a viable mobile wallet. Because Samsung Pay is a partner with leading banks in the United States, it's accepted anywhere that accepts card payments via swipe or tap.


Samsung Pay is safe and has been adopted by merchants within the United States, Puerto Rico and even the U.S. Virgin Islands. Using Samsung Pay is as simple as opening the app, selecting the card, authenticating it with a fingerprint a placing it near a card reader to pay.

Some forms of contactless payments are not apps but instead are a wearable device like a bracelet. The user taps their wristband on the payment reader the same way a Smartphone with a digital wallet would be.


The wristband transmits a radio-frequency identification (RFID) signal that the card reader picks up. Once the signal is picked up the payment transaction can go through. Most users wear the bracelet on the wrist or upper arm. One difference between the wristbands and the apps is that the bracelets can be tapped against the users own wrist.

Contactless payments are growing in popularity and making their way into more mainstream services. Most businesses are now supporting the use of Apple Pay, Samsung Pay, Google Pay, PayPal, and Chase Pay.


Contactless payments aren't as popular as cash or credit cards, but they are making so much headway into different industries that some experts believe they might wind up taking over as the preferred payment option.