How a contactless card works

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Contactless technology is a new interface for existing bank magnetic cards. A contactless bank card is a rectangular piece of plastic with a built-in microprocessor and an antenna for transmitting data at a distance. In this case, direct contact is limited by the distance at which information is read.

Contactless payments are a convenient alternative to carrying cash with you at all times, allowing you to safely and quickly make small daily payments in your usual places. Users do not need to look for money in their pockets, insert a card into the terminal, wait for an answer, enter a PIN, sign checks. Banking transactions are carried out instantly.

Contactless cards can be co-branded or classic, debit or credit, premium or standard. The principle of operation does not depend on the type of card, but is determined by the existing data transfer standards.

How a contactless card works
To learn how a contactless card works, you need to familiarize yourself with the internal content of the card. Inside the plastic of the contactless card there is an electronic filling that provides signal transmission:

• Microprocessor. Contains a payment application and specific customer data.
• Antenna. Provides signal transmission over the radio channel.
• Inductor. Stores energy for the primary RF pulse.
• Contact chip, required for making payments using standard terminals.

The contactless card operates according to the ISO / IEC 14443 protocol, which is used by various payment systems to implement payments with data transmission over a radio frequency channel. For signal transmission, a radio frequency of 13.56 MHz is used.

Let's take a closer look at how a contactless card works:

• the cashier punches a preliminary check with the display of the purchase amount;
• the buyer applies the card to the terminal, which has the option of contactless payment;
• during the contact of the card with the terminal, the inductance coil is straightened, power is supplied to the microprocessor;
• a payment application is launched in the microprocessor, which generates one-time keys for payment;
• the terminal receives a radio signal that transmits the CVV code, card and owner data;
• the information received is transferred to the bank;
• a banking operation is carried out in a few seconds (the bank confirms the authenticity of the data and allows the transaction);
• if the amount exceeds the maximum possible payment, then a request for confirmation of the payment is received (you must enter a PIN code);
• funds are debited from the client's virtual account, after which the terminal issues a purchase receipt.

The high speed of data transfer with a contactless card allows transactions to be carried out instantly, which increases the popularity of contactless payments.

Contactless payment technology security
Holders of cards with the ability to conduct contactless payments are protected from unauthorized access to funds due to encryption technologies and data transmission over secure channels. Based on how the contactless card works, security principles have been developed. The main features of making payments:

• Standards. Banking payment system Visa and MasterCard have developed unified data transfer protocols. Although the payment processing standards (PayWave, PayPass, MirPay) are similar, they have their own technical differences.
• Distance. RFID technology is used to transfer data between the chip and the terminal. The range of information transmission between the terminal and the payment instrument is 1–4 cm, which provides a physical level of protection. To receive information, the reader should be located almost close to the card.
• Cryptography. A one-time key (CVV-code) is generated for each transaction at the terminal's request. The generation technology is based on cryptographic keys, which each bank has its own, and a payment system. The security of contactless transactions is ensured by the EMV standard, which cannot be copied.
• Purchase amount. It is set based on the recommendations of payment systems for each country separately. The limit is set in the settings of the terminal equipment. Conducting a transaction exceeding the maximum allowed threshold requires confirmation from the owner (signature, entering a PIN code), otherwise, for the safety of the contactless card client, the transaction will be rejected by the issuing bank. Bank protection is also triggered when sequentially withdrawing small amounts in a short period of time.

Contactless bank cards have increased security criteria, in contrast to magnetic bank cards. But it doesn't hurt to protect yourself with shielded wallets, cases, cardholders, organizers, travel covers, because criminal schemes for stealing money are constantly being improved.