InvestorQ : What is the procedure that takes place in a contactless card?
divya Sing made post

What is the procedure that takes place in a contactless card?

seema Upadhyaya answered.
3 years ago

Contactless cards are plastic cards that use a contactless technology called NFC (near field communication) or radio-frequency identification (RFID). When a person is shopping with a contactless card, he/she only needs to wave it over the terminal, and the card uses radio frequencies and a one-time code to complete the transaction. This removes the need for the individual to swipe, sign, or dip the card.

The way contactless cards work is simple:

1. The merchant’s terminal reads the chip on the contactless card

2. The terminal transmits the data to a card-processing network (like Visa or Mastercard). This network then checks if the data that’s received is in the correct format or not.

3. In this step, there is verification of data and analysis of fraud. Only once the system deems everything to be accurate does it allow the card issued to receive data

4. The card issuer then confirms the card isn’t stolen and sufficient funds are available.

5. Data is then passed on to the issuer, through the card network, to the merchant and then the payment is approved.