Wireless Debit and Credit Card.

With the development of new technology and modern banking techniques many banks nowadays issue a Wireless Debit or Credit Card to their customers. Such a card has a WiFi symbol on it which enables contactless payment. Such Debit and Credit cards are recognized by the Wi-Fi symbol on them. If your card has such a symbol, then you can make payments without swiping your card. It means your card has a Contactless feature. The benefits of a contactless Card is that you can make a payment just by tapping your card without swiping it. Wireless Card uses ‘Near Field Communication’ (NFC) chip that makes use of high-frequency wireless communication for transferring data over a shorter distance that ranges from 5 cm -10 cm. 

         By using this technology you can make contactless transactions at the point of sale which makes it very easy to share data between devices and perform transactions without touching the device for making payments. According to the official Visa website for secured transactions the Contactless Card or payment-enabled device is used at Pont of Sale or POS terminal where contactless card is used that includes short-range wireless technology.

When you tap or place your card near the device, the contact signals will authorize your payment. According to the information given on the website, the card should be held 1-2 inches closer for use. This method for making payment is increasing in developed countries. Visa claims that other than the US, more than half the retailers in Australia, Canada, UK, and France accept this type of card 

 This trend is getting quite common in India, especially in supermarkets where payment is being made at the POS terminal by this method.

How does NFC work?

NFC known as Near Field Communication is a technology that makes it able to pass data between two devices. Generally, information is shared between your smartphone and another device, so that you can share data, perform transactions or even get discount offers by tapping your smartphone on smart discount coupons.

 NFC works on the principle of sending information over radio waves just as WiFi, Bluetooth, and some other technologies. NFC makes use of Radiofrequency Identification (RFID) technology which uses electromagnetic induction to transfer information.

The NFC standard has three modes of operation: the first one is of Peer to Peer mode, which helps to share information between two devices. This technology uses your smartphone which receives and sends data. Your smartphone becomes an active device while sending data and becomes passive while receiving data.

The second mode is the Read/write mode which is used for one way transmission of data. In this mode, the active device which is mostly your smartphone gets linked up with your passive devices such as NFC tags, in order to read information.

 The third mode is the card emulation. In this mode, the NFC device uses your smartphone and can function or act as a contactless credit card that makes payment as a normal credit card.

The NFC technology is used for transferring data, information, or even media files between two devices. These two devices can be your smartphone with the NFC feature. 

Benefits of Contactless or Wireless Card

Payment made by Contactless card is quite fast as compared to swiping cards. 

It is a convenient way of making payments as you need to pay using your smartphone or card. There’s no need to have a bulky wallet full of cash and cards. There are no more hassles of keying a PIN to approve transaction or signing receipts.

During the transmission of sensitive information NFC technology uses data encryption which reduces the threat of hackers stealing valuable information.

There are no more typo errors when entering your PIN since the contactless payment system is accurate, secure and quick.

There is no need to hand over your card to some other person at the counter while making payment.

You don’t need to type the password for small transactions.

It creates digital lists of expenses and customers can keep track of loyalty points and rewards during purchases.

Some banks may also offer cashback when you use the e-payment feature.

The mag-stripe card has amazing features that enable mobile payment apps which you can’t imagine such as remote deactivation, virtual card provisioning, and user-configured pin-protection.

Drawbacks of Contactless or Wireless Card

While most banking facilities promote Wireless or Contactless payment as safe, there are many cases of theft that have been reported. In the year 2016, there was an image that went viral on social media where a man was holding a POS in a crowded train and receiving payments from the nearby contactless card without the knowledge of the owner. As scary as it may seem, the thieves can go to any extent.

Most of the banks claim that wireless payment is very secure because the card needs to be very close (1-2 inches) of the payment machine.

However, a merchant who has done his KYC norms will not use his POS (point of sale) terminal for frauding people as it can be easily traced. The RBI has set up a limit of Rs. 2000 for transactions done by Contactless card. Therefore the users have to enter their pin for making payment.

If your credit or debit card gets lost or misplaced, then anyone can use it for making payments of up to Rs 2000 without needing to enter your pin or password. You might think that the amount in your account is getting debited even though you are not making any transactions, that’s because your wireless card is being used for an increasing amount of theft. The wireless card technology is now in its initial days and hence there are no major frauds reported until now. The wireless card technology is beneficial in many cases however, dangers related to it cannot be ignored.

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Advocate Aditya Pratap
About Advocate Aditya Pratap 65 Articles
Aditya Pratap is a lawyer practising in Mumbai. He argues cases in the Bombay High Court, Sessions and Magistrate Courts, along with appearances before RERA, NCLT and the Family Court. For further information one may visit his website adityapratap.in or view his YouTube Channel to see his interviews. Questions can be emailed to him at aditya@adityapratap.com.