What are Contactless Cards?

Around five years ago, in 2015 the first contactless card was launched in India. These contactless wi-fi credits and debit cards work on two technologies where one is the NFC (Near Field Communications) technology while another one is the RFID (Radio-Frequency Identification) technology. These cards come with a feature known as tap to pay which means that you can just tap your card to a point of sale (POS) machine to have a complete transaction without entering your authentic pin. If your credit card has a symbol on it that looks like the ‘wi-fi’ symbol, then you own a contactless credit card. These card helps you to make a payment without having any physical interaction as you just need to tap the card against the terminal or pos machine. 

The payment with the help of these cards is less time-consuming as you don’t need to stand in long queues to make a payment. These cards provide quick payment as if a normal card takes two minutes, a contactless card would take about 12 seconds. Visa and MasterCard are the largest payment processing network in the world and have been promoting contactless payments as one of the ways to avoid contact during the covid-19 pandemic. The business reports here say that these contactless cards are gaining steam due to the coronavirus. As people prefer contactless payment to more secure, therefore the demand for contactless cards have hiked in the covid-19 times. Further, the global value of contactless debit/credit transactions is predicted to exceed $2 trillion by 2021.

Basic Components

There is an evolution over the years by card-issuing banks and the card industry to ensure secure transactions as well as provide ease of shopping for their customers. Almost everyone is well aware of these cards how they look, but still, it is your responsibility to know about card features and elements very well to avoid card-related fraud. Here below is the face of the contactless card.

The face of contactless cards 

Visa Classic – This can be found in the top right or left of the card according to the particular banks. In place of Visa Classic, there can be the name of the bank or the logo of the bank that has provided you the credit/debit card.

EMV Chip – EMV embedded into your cards is short for Europay, MasterCard, and Visa. This metal square chip is generally found on the front side of the card with the feature of providing a secure transaction. It stores the authentic data of the cardholder that is needed to process a transaction. These are like a fully operating computer system with a microprocessor and some memory and some application software embedded in your cards which makes cloning of card a difficult task for fraudsters as compared to magnetic stripe cards that are found on the backside of cards. The sensitive data information is stored on these cards in encrypted form and so is the transmission of information. The major issue of replacing the magnetic stripe card is the static information it stores which is easily captured and cloned while the EMV chip stores dynamic information.

Wi-Fi Icon – A wifi or a wave type of symbol placed on top of your card is the icon of contactless cards. This works by just tapping on the machine without having to hand over the card to anyone. You can make a payment of less than Rs. 2000 while you would be asked to enter the PIN if it exceeds a certain amount. 

Card Network – The VISA in the above card is an example of a card network, often called ‘card brands’ or ‘card schemes’. There are five major credit card networks active in India – Visa, Mastercard, RuPay, American Express and, Discover. Their major role is to approve and process the transaction. They act as a payment bridge between the merchant and the bank. The interesting fact is that the very first number on your card represents the card network. Number 4 is for Visa, 5 is for Mastercard, 6 is for RuPay, and 3 is for Amex.

Card Number – These 14 to 19 digit numbers are the most sensitive data elements of your cards. It identifies your account with a card issuing bank, this unique series of numbers help you to make an online payment.

The reverse side of the contactless card

The backside of your card also contains some important information, above is the reverse side of these contactless cards.

Magnetic Stripe – The black or grey strip at the back of your card represents the magnetic stripe that stores all your card information. The magnetic stripe is swiped in the card reader to make a payment successful. Cards having magnetic stripe do not have contains data in encrypted form so, fetching and copying data becomes an easy task.

Security Code – Here in the above diagram the 3 digit code shown represents the security code where its functionality is to provide security to shop online. In the cards such as Mastercard, Visa, and RuPay it is in the form of 3 digits printed on the backside of your card whereas Amex has 4 digits printed in the front.

Hologram – This is the most important proof of your card proving its authenticity, as hologram are difficult to fake. It proves that it is valid and not a cloned one. It can be provided either in the front or the back end of your card.

Bank Contact Detail – This is for an emergency case if you find your card is not working or you need to get it blocked. Generally, you will find the contact number of the bank call center on the end side of the card.

Working of Wi-Fi Cards

The contactless cards support two modern technologies where the first is near field communications (NFC) technology and the second is the radio-frequency identification (RFID) technology. NFC and RFID are global wireless or rather contactless communication technologies. These cards contain a chip and an antenna that is based on radio frequency (at data rates of 106 to 848 kbits/s). These radio waves generate signals and connect with the reader device at the point of sale to have a complete transaction. When you tap the card against the contactless terminal, the detail gets transferred wirelessly from the card to the terminal and the payment gets processed insecure manner. However, the card does not have a battery and is not powered. NFC is also based on RFID protocols. NFC enabled in the card gives the facility of short-range data transfer and uses a 13.56 Mhz radio frequency technology that only transmits digital data within a concise range that is about 4 centimeters. It is considered a quick and easy way to pay since it doesn’t require the consumer to input a pin. In India, these NFC- based credit card usage is gradually growing.

Pros of Contactless Cards  

• Security – The payment using the contactless card is in encrypted form, meaning it is difficult to intercept and steal. So, only the pay terminal can read that information and transactions can’t be duplicated. There is no need to enter a pin for a small purchase.
• Speed – The contactless cards take about 12 seconds to have a successful transaction. It is the fastest and easiest way to pay for a smaller purchase. There is no more standing and waiting in a queue.
• No Physical Contact – There is no physical contact while making a payment you don’t need to hand over the card to someone or swipe or dip into the pos machine. The card just needs to be tapped to pay.
• Beneficial for senior citizens, for whom recalling the pin of the card is a challenge while making a payment.

Cons of Contactless Cards

• Limit – There is a limit provided on these contactless cards beyond that certain limit you would be asked to enter a pin to make a transaction.
• Not yet accepted everywhere.
• Prone to Digital Pick Pocketing – There was a piece of news spread about hackers using RFID scanners to electronically ‘pickpocket’ credit card information straight from user wallets. Further using the information to clone.

Contactless Card Frauds  

RFID technology used in contactless payment is less secured than chip and pin technology. Anyone with physical possession of the card can use it for payments without knowing the authentic pin of the actual owner. Though the stealing would be in a small amount the fraudster can make about five contactless payments through the card without asked to enter the pin. However, in the event a contactless card is lost or stolen, the card-issuing bank needs to be immediately notified to stop all further transactions through the stolen card. There are also few mobile applications through which the information on RFID cards can be read easily. It is a sort of risk to carry these RFID cards in a crowded place where an anonymous person can fetch information from an RFID card. There is a rumor about electronic pickpocketing of these cards means a fraudster standing close to you near the point of sale will be able to electronically pickpocket from contactless cards.

Preventing RFID Frauds

Metal Foil – This is the easiest and cheapest method of protecting your RFID-based technology cards. Aluminum foil is a conductor of electricity, radio waves are a form of electromagnetic induction that can be blocked by the metal foil. The working of foil is such that it converts electromagnetic radiations into thermal energy. So the electromagnetic waves that hit the conductive material are partially reflected and partially refracted. Though this approach is not 100% reliable still it works fine in most cases.

RFID Blocking Sleeves – This is the most common product in the market. These sleeves are designed in such a manner that they can fit within your existing wallet or purse. They are made up of foil-like material with some combination of copper and aluminum and then covered in a strong material like Tyvek. They are capable of blocking the entire signal. These sleeves have been government tested and approved. It works the way Faraday shield works.

RFID Blocking Wallet – These wallets are designed so to protect electromagnetic waves trying to intrude. These wallets are more secure as compared to RFID blocking sleeves as they are not thin like the blocking sleeves. The slots in the RFID wallet are 100% RFID protected. Here you can store a lot more in the wallet compared to that of sleeves. Plus, since the material is embedded into the leather, it will last much longer than any sleeves ever could. They work by acting as a Faraday cage which creates a screen around your cards that stops electromagnetic fields from interacting with the cards. The waves bend to go over and below the wallet to the other end. That denies the waves contact with the readable cards inside the wallet, and consequently, no data is sent back.

RFID Blocking Card –  This type of card is the same shape and size as a regular credit/debit card and is placed together with the cards it should protect. It contains jamming devices that are activated automatically when someone tries to scan the payment cards.