All you need to know about contactless debit and credit cards

State Bank of India and ICICI Bank have launched contactless cards in the country, which will help make transactions faster. These cards, which will soon be launched by other lenders, such as HDFC Bank, are said to work faster than the regular debit/credit cards or cash payments since they work on a wireless network.

Additionally, the Reserve Bank of India has now removed the second factor authentication required for transactions up to Rs 2000. This makes the usage of these cards even faster. Here is a look at all that you need to know about these cards. 

How does it work?

These cards work on the Near Field Technology (NFC) that employs radio transmission to send and receive information. This enables customers to make payments by waving or tapping the cards near the merchant terminal instead of swiping the cards. After this you need to enter your pin and your transaction is completed. As a result, you no longer need to hand over your card to the merchant to complete the transaction.

However, if needed these cards can also be used in the traditional way of swipe or dip also. Payments above Rs 2,000 are not eligible for contactless transactions. 

What are the benefits?

It increases the ease and convenience of transactions. Moreover, the speed at which the transaction can be carried out is almost double than the traditional method of swiping or dipping a card that is used currently.

Is it secure?

Banks claim that these cards are completely secure considering that unlike the cards in use now these do not have to be handed over to the merchant and so is always in your sight. After tapping, you need to enter the pin number of the card to carry out the transaction so that the layer of security remains intact.

However, there have been skimming attacks on these cards in some other countries where they had been introduced earlier. In certain instances, fraudsters have been able to skim the data using mobile applications. However, experts say that thee security threat of skimming is present with regular cards as well.