How contactless payment systems work

A kind of revolution in the financial world happened when payment cards were invented and introduced. Plastic is much more convenient than cash, it saves not only space in your wallet, but also time spent waiting in queues. But cards are gradually replaced by a more convenient system - NFC (Near Field Communication), which means "near field communication".

The essence of the method consists in the fact, that in smartphones of the last generations there is a special chip, which sends the information to the deciphering device of the terminal. To conduct the transaction, it is not necessary to take out the card, enter a pin-code or perform other functions. All the information is already stored in the gadget.

The convenience of using NFC technology is that it is completely safe. You don't keep a card number or a password in your phone's memory, and no one will be able to use your personal data. The investor Nikita Izmailov and his partners have quickly realized the benefit of technology, opening the possibility for sportbank customers to pay bills with the help of Google Pay, Apple Pay, Garmin Pay and Swatch Pay for Visa cards. And the last two technologies allow not even using a phone, only a smart watch.

Benefits of NFC

A client can not only pay with a built-in chip but perform almost all bank operations - use cashback, discounts, accumulate points and interest. The chip protection system is more secure than the card. The number of the electronic purse is not stored on any device through which the payment was made. The system assigns the user a multi-digit individual number that no one else knows.

Each transaction automatically generates a one-time security code. And the last level of protection - NFC chips are installed only in the gadgets, equipped with biometrics. That is, the smartphone can only be opened by a fingerprint or face scanner. Apart from the owner, no one will be able to use not only NFC, but the phone in general.

As of today, Ukraine is among the countries with the highest dynamics of introducing and using contactless payments. The merit of this, paradoxically enough, is in some delay with the introduction of bank cards and terminals. Ukrainian banks began immediately to install new generation terminals equipped with NFC chips. Many foreign banks have to replace old POS-terminals with new ones which requires big investments and slows down the process. Leading banking systems of the world have almost completely switched to NFC-payments.