The credit cards that let you pay with no PIN

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by: MarkeD
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Word Count: 742
Date: Tue, 23 Mar 2010 Time: 5:25 AM
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You know how frustrating it can be when you are fumbling about for small change. It usually happens when you are running late for a meeting or about to catch a train and you just want to quickly pay for a newspaper or coffee. Now you can pay for small items like these with a contactless credit card, without even taking it out of your wallet. No more searching for change and no need to insert your card into a terminal.

How do they work?

Credit cards with contactless payment technology allow you to pay for items under £10 without having to input your PIN. You tap your card against a reader in the shop and it automatically charges you for the item. It's like having the exact change every time.

You pay quickly and go quickly.

Who can get one?

Many card providers are now offering contactless technology or have announced their intention to do so.

Both MasterCard and Visa have their own schemes - PayPass and payWave, however both use the same card readers so are accepted in the same places.

Barclaycard uses MasterCard's PayPass technology, Halifax and Bank of Scotland offer Visa payWave cards and many other banks are rolling out the cards.

Most are waiting until your current credit card expires before sending a new contactless version, but you should get in touch with your provider to see if it's offering the technology.

Where can I use it?

The cards are specifically designed to use in busy retailers for low-value purchases. Newsagents are a good example as most items costs less than £10 and you want to get in and out as quickly as possible. Cinemas, train stations and coffee shops are also accepting the cards.

London led the ‘contactless card' drive but the technology is quickly rolling out across the UK. You can tap and go up and down the country, from Café Nero in Aberdeen to Bliss Hairdressing in Brighton.

You can search for participating stores in your area on the Visa and MasterCard websites but it's good to know they are also accepted in many countries, including the United States, Japan, Australia and South Africa.

Are they safe?

There have been some concerns about the safety of contactless cards, from fears that those with a card in their pocket could be incorrectly charged simply by walking too close to a reader, to worries that criminals could electronically read details from your credit card without even seeing it.

However, the credit card industry points out that the data used to make transactions is encrypted and couldn't be used again fraudulently if somebody intercepted the signal.

It also stresses that to make a payment you need to hold your card next to the reader for a couple of seconds at exactly the right time, so it can't be done accidently either.

But what if your card was stolen? Couldn't a thief use it to pay for dozens of items under £10?

In theory, they could get away with making a few small purchases, although for security the readers automatically ask you to enter your PIN every now and again. This confirms you own the card and restricts the chance of extended unauthorised use.

If your card is used for a small number of low-value purchases you are not liable as long as you have acted with reasonable care - in other words the same rules apply as with any credit card.

What's next?

Contactless credit cards will soon become part of our day-to-day lives, but the industry is already looking at going one step further, and cutting out cards altogether.

Barclaycard and Orange launched the contactless Orange Credit Card in January and plan to roll out contactless payments via mobile phones in the next year or so.

Some organisations are even looking at the use of biometric authentication using retina scans - meaning you will be able to pay with the blink of an eye!

For now though, credit cards are still essential financial tools, so make sure that you shop around to find the very best one for your needs.

About the Author

The credit cards that let you pay with no PIN was produced by confused.com, the credit cards comparison website.