What is Contactless Payment?

What is Contactless Payment?

Consumers world over are demanding contactless payment in everyday transactions, including for transit fare on buses, trains, and paratransit. Many service providers may still have questions about what contactless payments are, how they work, and whether they’re secure. We’re here to help.

Vix Technology has integrated two main forms of contactless payments into our line of fareboxes, so we have experience seeing how this application of technology can help transit agencies in numerous ways.

What is contactless payment?

Contactless payment refers to several methods of receiving and processing payments with technology that enables “tap” payments or mobile wallet payments. These payment methods are considered contactless because they can process with just a few millimeters between the card and the processing unit. 

Perhaps most importantly in today’s transaction environments, this means the payer does not need to hand anything into the payee’s hands. The transaction is completed entirely on the payer’s side.

How does contactless payment work?

There are two main ways to conduct a contactless payment. One is with the “chip” in a credit or debit card. The second way is with an app or “mobile wallet” built in to a smartphone.

With chipped cards, which now make up the majority of consumer’s credit and debit cards, we see the fusing of RFID (radio frequency identification) technology with NFC (near-field communication). These work together to allow users to “tap” their card—or hold it very closely—on the payment processor as their payment information is transmitted in a secure, wireless format.

Mobile wallets like ApplePay are also gaining tremendous traction among consumers thanks to the ease of storing credit or debit card information on their smartphone. ApplePay has also launched a built-in Transit Card to serve as a digital pass for transit systems across the world. 

Whether consumers use their chipped card or a mobile wallet, they can rest assured that their transaction is secure. The data is encrypted and a dynamic card verification system ensures one-time use codes. In fact, NFC technology is so secure that the United States Department of State uses it for ePassports. With their own profits in mind, the three major credit card companies—Visa, American Express, and Mastercard—have all encouraged the shift to contactless payments as they actually reduce fraud and its associated costs, which can run into the billions each year.

How can Vix Technology help?

Vix Technology works seamlessly with these consumer-end payment technologies. Our hardware and software combine to provide the speed, safety, and convenience that is pushing contactless payments to the forefront of everyday transaction options.

Our farebox technology helps on several key metrics important to any transit agency.

• Contactless payments are faster

The studies are in. Contactless payments are 50% faster than card-swiping or chip-reading, and a whopping 60% faster than paying in cash. This reduces dwelling time and helps keep routes more efficient. Saving just 18 seconds over traditional cash fares allows transit agencies to save a minute for every three passengers onboarded. 

• Ability to still accept cash and tokens

While most riders own a smartphone, not all of them are well-versed in using the mobile wallets included on them. Additionally, some riders face barriers to owning a credit or debit card. For any variety of reasons, transit agencies may choose to continue accepting traditional cash fares, and Vix Technology makes it easy to do so alongside these modern contactless payment methods.

• Adapting to COVID-19

Transit agencies are essential services that continues to function despite new waves of the COVID-19 virus. This makes it vital for agencies to plan ahead so they can quickly adapt to new regulations and local and state orders. Contactless payment integrated with Vix Technology fareboxes are an easy-to-deploy solution that can significantly reduce dwelling time, speed up congested fare lines, and reduce contact between drivers and passengers, allowing the use of vinyl shields and other physical safety barriers.