Interest in contactless cards is manifested in connection with the desire to occupy the following niches in the field of cashless payments with their help:
The analysis shows that due to the fact that with contactless payment, as a rule:
If, in addition, the client is not issued a receipt for the operation he performed, such as when paying for a metro ticket, the time for making a contactless payment may take less than a second. This mode of using a contactless card (offline authorization, lack of verification of the cardholder and the buyer's check) is commonly called "Tar and Go".
In fig. 7.1-7.3 shows the average transaction processing time for cases, respectively, of payment for the purchase in cash, contact and contactless cards. The measurements were carried out between the moment the cashier was handed over to the cashier to pay for the purchase of cash / card (hand-over to cashier) and the moment the cashier returned the change in cash / card to the buyer (hand-back of balance / card & receipt). Note that the measurement for the case of a contactless card (Fig. 7.3) was performed on the condition that the purchase receipt was printed and returned to the customer.
The security of contactless card payments stems from the fact that the card is microprocessor-based and supports the security and risk management mechanisms defined in the EMV standard and payment system specifications.
Rice. 7.1. Time to complete a transaction with cash
Rice. 7.2. Transaction time using a contact card
3-4 seconds (offline) 4 1-2 sec 1 I ------------------------------------ ------- H ---------------- H
Wave Authorization Hand-back
I 4-6 sec (offline)
Wave 15 - 20 sec (online) Hand-back
Rice. 7.3. Time to complete a transaction using a contactless card
A very important purpose of contactless cards from the point of view of payment systems and banks is to replace cash payments with them. For example, in 2006, 80% of all personal payments in Europe (180 billion transactions per year) were made in cash and only 6% of payments were made using a plastic card.
Traditionally, it is believed that a debit card is more profitable than cash for transactions over € 15. However, if the transaction costs are reduced (due to the offline nature of the authorization of the transaction, the lack of verification of the cardholder and the issuance of a check), which is achieved by using contactless cards, it turns out that the threshold for the size of a transaction with a contactless card, at which payment by card remains more profitable than payment in cash. can be lowered to € 5!
At the same time, 25% of all personal payments in Europe range from € 5 to € 15. Assuming that 40% of these transactions can be transferred to cards, the increase in the number of card transactions will amount to 18 billion per year and will increase the share of card transactions in Europe from 6 to 14%!
It is precisely because contactless cards are an effective tool in the fight against cash that payment systems pay increased attention to contactless card technology. Below are the contactless payment projects launched by the leading payment systems:
The leader in the promotion of contactless cards is the MasterCard payment system. At the beginning of the first quarter of 2009, banks of this payment system issued approximately 55 million contactless MasterCard PayPass cards, which can be used in 146,000 terminals located in 25 countries.
The following are the main payment applications for contactless cards:
- new markets for non-cash payments, for which contact cards and cash are not suitable due to the insufficiently high processing speed of transactions using these payment instruments (payment for travel in public transport and on toll roads, fast food restaurants, e-tickets, parking, payment for refueling at gas stations);
- an increase in card turnover by reducing the cost of processing transactions and, as a result, capturing a niche of payments ranging from 5 to 15 euros.
- ease of use (the card does not need to be handed over to the cashier, correctly oriented and accurately inserted into the reader's window, in some cases the card may be in its holder's wallet when paying);
- higher speed of transaction authorization (the processing time of the transaction on the card side is approximately 0.15-0.7 s, sometimes during the operation the verification of the card holder and the analysis of the card details by the cashier are not applied);
- high level of security of operations, typical for operations on microprocessor cards;
- higher reliability of using cards and terminals: due to the absence of mechanical contact between the card and the terminal, a lower level of their physical wear is provided. In addition, contactless terminals are protected from vandalism, when the reader window is clogged with debris, which makes it impossible to use the contact interface of the card, for example, in self-service terminals (vending machines);
- variety of form factors of card products - cards, key rings, bracelets, etc .;
- wide range of temperature conditions (from -20 to +50 ° C), protection from water and dirt.
The analysis shows that due to the fact that with contactless payment, as a rule:
- the card is not handed over to the store cashier (which means that checks of the card's external details - holograms, microprints, etc.) are also not carried out;
- the card does not need to be inserted into the reader;
- verification of the cardholder is not used;
- the operation is performed offline;
- the processing time of the operation on the card is approximately two times less than the time for the contact microprocessor card,
- a transaction using a contactless card takes 4-6 seconds, which is 2.5-3 times faster than paying in cash, and about 6 times faster than using contact payments.
If, in addition, the client is not issued a receipt for the operation he performed, such as when paying for a metro ticket, the time for making a contactless payment may take less than a second. This mode of using a contactless card (offline authorization, lack of verification of the cardholder and the buyer's check) is commonly called "Tar and Go".
In fig. 7.1-7.3 shows the average transaction processing time for cases, respectively, of payment for the purchase in cash, contact and contactless cards. The measurements were carried out between the moment the cashier was handed over to the cashier to pay for the purchase of cash / card (hand-over to cashier) and the moment the cashier returned the change in cash / card to the buyer (hand-back of balance / card & receipt). Note that the measurement for the case of a contactless card (Fig. 7.3) was performed on the condition that the purchase receipt was printed and returned to the customer.
The security of contactless card payments stems from the fact that the card is microprocessor-based and supports the security and risk management mechanisms defined in the EMV standard and payment system specifications.
Rice. 7.1. Time to complete a transaction with cash
| 1-2 sec * 1 U________ | 15 - 20 sec 2 |
|
| 1 Hand-over Inserts | Authorization | Hand-back |
| 25 - 35 sec | ,1 | |
| Hand-over | • 1 Hand-back |
Rice. 7.2. Transaction time using a contact card
3-4 seconds (offline) 4 1-2 sec 1 I ------------------------------------ ------- H ---------------- H
Wave Authorization Hand-back
I 4-6 sec (offline)
Wave 15 - 20 sec (online) Hand-back
Rice. 7.3. Time to complete a transaction using a contactless card
A very important purpose of contactless cards from the point of view of payment systems and banks is to replace cash payments with them. For example, in 2006, 80% of all personal payments in Europe (180 billion transactions per year) were made in cash and only 6% of payments were made using a plastic card.
Traditionally, it is believed that a debit card is more profitable than cash for transactions over € 15. However, if the transaction costs are reduced (due to the offline nature of the authorization of the transaction, the lack of verification of the cardholder and the issuance of a check), which is achieved by using contactless cards, it turns out that the threshold for the size of a transaction with a contactless card, at which payment by card remains more profitable than payment in cash. can be lowered to € 5!
At the same time, 25% of all personal payments in Europe range from € 5 to € 15. Assuming that 40% of these transactions can be transferred to cards, the increase in the number of card transactions will amount to 18 billion per year and will increase the share of card transactions in Europe from 6 to 14%!
It is precisely because contactless cards are an effective tool in the fight against cash that payment systems pay increased attention to contactless card technology. Below are the contactless payment projects launched by the leading payment systems:
- VISA payWave (MSD, qVSDC, full VSDC, VISA Wave in Asia Pacific);
- MasterCard PayPass (PayPass MagStripe, PayPass M / Chip, PayPass M / Chip Flex);
- Amex ExpressPay;
- JCB DualCard (FeliCa), QUICPay (only contactless cards or telephones supporting the FeliCa protocol are used) and J / Speedy (used outside Japan, based on ISO 14443 and EMV cards, VISA Wave terminals are used).
The leader in the promotion of contactless cards is the MasterCard payment system. At the beginning of the first quarter of 2009, banks of this payment system issued approximately 55 million contactless MasterCard PayPass cards, which can be used in 146,000 terminals located in 25 countries.
The following are the main payment applications for contactless cards:
- payment for travel in transport (metro, trains, buses, taxis);
- payment for refueling vehicles at petrol stations, where payment terminals are integrated with a refueling machine (outdoor terminals);
- payments in fast food restaurants and small wholesale stores of essential goods at gas stations, bus stations and metro stations (convenience shop);
- payment for car parking;
- payments through self-service terminals (vending machines);
- admission to the stadium and payment for food in the stadium buffet.
