Contactless payment — Definition Explained Simply | Examples & Role

Contactless payment is a modern technology that allows customers to pay for purchases simply by holding their bank card, smartphone, or smartwatch near the payment terminal. The payment is processed using NFC (Near Field Communication), which enables a fast and secure exchange of data between the device and the terminal.

During a contactless transaction, the card does not need to be inserted or handed to a cashier — it is enough to hold it a few centimeters from the reader. Such operations take less than a second, and for small amounts, entering a PIN code is often not required.

How contactless payment works

• The customer holds the card, phone, or watch near a terminal with the NFC symbol.
• The terminal exchanges encrypted data with the device.
• The bank authorizes the transaction and debits the amount from the account.
• The payment is completed — a receipt appears on the screen or is printed.

Forms of contactless payment

• Bank cards with the Wi-Fi symbol (PayPass, PayWave).
• Mobile payment services: Apple Pay, Google Pay, Samsung Pay.
• Smartwatches and wearables that support NFC payments.

Advantages of contactless payments

• Speed — payment takes 1–2 seconds.
• Convenience — no need to insert the card or enter a PIN (for small purchases).
• Security — tokenization protects card data from being shared directly.
• Hygiene — no physical contact with the terminal.

Contactless payments abroad

Contactless payments work worldwide — in shops, transport, cafés. When paying abroad, the terminal automatically performs currency conversion at the bank’s exchange rate.

Examples

• Paying for coffee in Berlin using Apple Pay.
• Purchasing goods with a Visa PayWave card without entering a PIN.
• Buying a metro ticket via Samsung Pay on an NFC-enabled smartwatch.