Will contactless payment really prevent identity theft?
New technology increases the level of convenience day by day but at the same time it may create complications in the existing system! The new technology of contactless payment is right now promising to arrest identity theft by its unique features.
What is contactless payment?
This is the latest development in the world of electronic payments. When you want to make the payment using your credit card, you need not swipe the card in a machine. Just show the card to the scanner and the system will process your payment within seconds.
This is a very convenient method of making small payments. For example, if you are filling gas in a gas station, there may be a queue for payments at the cashier's counter. For a small payment, you may be required to wait for minutes. Even the processing of your cash transaction takes time. The average time for processing such a transaction is about 35 seconds.
With this Radio Frequency Identification (RFID) technology, such payments can be completed in a record time of 13 seconds! As there is no need of your signature for payments under $25, you will save time and at the same time the risk of credit card fraud is reduced considerably.
How it works?
In every card, a built-in encryption key is inserted. Every transaction will have a unique reference and the transaction information cannot be used more than once. So the information collected by the card reader cannot be re-used by anyone else. The name of the cardholder is also not entered on the security chip. So the details about the cardholder will not be available to the identity thieves from the processing machine. In some systems, the account number is also not attached to the chips and a routing number is used for every transaction. So there is no visible clue for anyone to trace back of the details of the cardholder.
The merchants are also happy with this arrangement. They will be able to process the payments of the customers in a shortest possible time and the risk of theft of the customer details is also reduced considerably.
The technology is brand new so perhaps the identity thieves have not got their hands to it. Presently it appears promising but time will decide whether it is a seamless technology to put an end to identity theft of credit cards.
What is contactless payment?
This is the latest development in the world of electronic payments. When you want to make the payment using your credit card, you need not swipe the card in a machine. Just show the card to the scanner and the system will process your payment within seconds.
This is a very convenient method of making small payments. For example, if you are filling gas in a gas station, there may be a queue for payments at the cashier's counter. For a small payment, you may be required to wait for minutes. Even the processing of your cash transaction takes time. The average time for processing such a transaction is about 35 seconds.
With this Radio Frequency Identification (RFID) technology, such payments can be completed in a record time of 13 seconds! As there is no need of your signature for payments under $25, you will save time and at the same time the risk of credit card fraud is reduced considerably.
How it works?
In every card, a built-in encryption key is inserted. Every transaction will have a unique reference and the transaction information cannot be used more than once. So the information collected by the card reader cannot be re-used by anyone else. The name of the cardholder is also not entered on the security chip. So the details about the cardholder will not be available to the identity thieves from the processing machine. In some systems, the account number is also not attached to the chips and a routing number is used for every transaction. So there is no visible clue for anyone to trace back of the details of the cardholder.
The merchants are also happy with this arrangement. They will be able to process the payments of the customers in a shortest possible time and the risk of theft of the customer details is also reduced considerably.
The technology is brand new so perhaps the identity thieves have not got their hands to it. Presently it appears promising but time will decide whether it is a seamless technology to put an end to identity theft of credit cards.
Source...