How Contactless Payment Technology Further Enhances The E-Wallet

How Contactless Payment Technology Further Enhances The E-Wallet


These days, e-wallets represent just one out of the incalculable different ways in which digital technology is revolutionizing how we do things. With contactless payment technology, you can enjoy a superior payment experience when looking to shop online, pay bills, and so on via a third-party wallet. The adoption of the mobile wallet in the United States continues to gain ground as more secure contactless payment options are provided to improve the digital exchange experience.

A 2014 Gallup survey found out that 71 percent of Americans own 1 credit card, at least, and that 2.6 active credit cards are in circulation for each man, woman, and child in the US, including the people that don’t make use of them. Americans that utilize credit cards have 3.7 active cards each on average. And that stat doesn’t take into account that prepaid debit cards and bank-issued debit cards leverage the same payment options — like MasterCard, Visa, and the likes — as several credit cards in use.

While the Gallup survey actually reveals that there is a reduction in the overall usage of credit cards and that habitual card users are getting more prudent, credit and debit cards are not going out of circulation in the near future. As a matter of fact, payment card technology (e-wallet) is undergoing immense changes owing to contactless payment system, also called mobile payment system or mobile tap-to-pay system.

Electronic wallets store information on your credit and debit card in a secure manner, enabling smartphone-wielding consumers to make payment for in-store purchases securely, using those cards with just a wave of, or a tap on, their mobile phones in front of dedicated radio frequency readers. Common mobile payment systems in the US are Apple Pay, Samsung Pay, and Android Pay (previously known as Softcard). In the heart of today’s article, we will be discussing the benefits of contactless payment technology for e-wallets.

FanAppic - e-wallet

How Contactless Payment Systems Work

Before we take a dive deep into the nitty-gritty of this write-up, let’s briefly look at how mobile tap-to-tap payment technology operates.

Near-Field Communication (NFC) Technology and Readers

Contactless payment system relies on near-field communication technology. NFC utilizes extremely short-ranged radio signals — that are only effective up to around 20cm, but have optimum performance within a range of 4cm — for transmitting data rapidly during in-store payments. Near-field communication technology has a plethora of uses, such as contactless transit passes, proximity cards (or security keycards), bootstrapping devices for boosting power and WiFi network bandwidth.

Near-field communication technology is not revolutionary as it draws on many years of breakthroughs in radio spectrum. But it has more applications than several other kinds of radio signal solutions due to the fact that its standards are controlled, strictly, by the NFC Forum. This is a consortium that comprises over 140 manufacturers and service providers whose operations rely on near-field communication technology. Also, NFC signals have a number of general technical edges over other types of short-range radio communication, like Bluetooth and WiFi.

Stored Payment Cards, Loyalty Cards

As mobile payment systems are not bank accounts, they do not contain cash balances of their own, although they are occasionally paired with e-wallets with similar offerings, such as Android Pay and Google Wallet (a digital wallet holding real cash).

What mobile tap-to-pay systems do is, storing debit and credit cards securely for on-demand use. Once the payment system app is downloaded on your phone (if it is among the default apps on your mobile device phone), you can include cards, as many as you like.

In the majority of these systems, you are require to snap pictures of the front and back of each card, and provide answers to certain questions in a bid to verify your identity. Also, the majority of mobile tap-to-pay systems store and sync with store electronic coupons and with loyalty cards.

Procedure for Payment

It is quite convenient to make in-store contactless payment. Though it functions on different systems in a slightly different manner, usually you simply have to unlock your smartphone, launch the payment app (that you can leave open if you need to do multiple transactions), take it within one inch or two close to the NFC terminal, and probably authenticate your identity by scanning your fingerprint or by providing your PIN.

If you prefer changing your payment method from your default card, simply head to the app menu and choose from a list of your stored cards, after which you can now complete payment. For purchases made over the Internet, you need to select the suitable contactless payment system from the menu of payment options before completing check-out as normal.

In these 2 cases, your stored card will be charged as it normally would if you used the option of swiping it through a magnetic reader or entering the number on the Internet. Also, you will still receive statements from the issuer and pay based on the normal schedule. You will also get to receive points or perks automatically, which are specific to your card.

How Mobile Payment Systems Further Enhances Digital Wallet

Every shopper always find long lines or delays a tad inconvenient as part of their retail experience. A number of popular mobile wallet options, including Apple Pay and Samsung Pay, ask users to complete a first step of entering their credit card details manually into the application to start making payments. This engenders friction to the payment process, which can actually be avoided when consumers utilize the mobile wallet app of their financial institution.

This friction could even become exacerbated with third-party wallets that require that you first download an app and then enroll for a service. That additional step of registering your card is not necessary with a bank-enabled digital wallet, since the app is connected to your bank account already and utilizes the trusted transaction authentication of the bank for streamlining payment processes.

Apart from this, there’s also an inherent trust issue in exchanging your account details, particularly when dealing with a third-party payment portal. Using robust mobile-enabled digital banking security via mobile pay-to-pay system, enrolling your card on the same mobile banking service will not bring about any concern for you or your bank as all you need do to make a transaction is to tap or scan your smartphone.

Here are some key benefits of contactless payment technology for digital wallets:

It Provides Robust Data Security:

Incorporating mobile tap-to-tap payment systems in digital wallets offers customers strong data security. With Near Field Communication technology and secure encryption of contactless payments options, customer data is kept safe and secure.

Mobile payment systems are anticipated to grow in popularity in the coming years as shoppers seek more innovative and convenient means of making digital exchange.  According to a 2016 study, close to 60 percent of North American consumers know about contactless payment options and also anticipate its use to rise. Today, a lot more users are familiar with mobile payment systems and utilize them in paying for items in stores.  

Contactless Payment Technology reduces payment friction and speeds up transactions: Users of EMV chip transactions usually gripe about the time that transactions take at the terminal. Though a lot of consumers and businesses have got used to this longer transaction time, they are ditching making payment in the traditional (swiping) way for contactless options that are faster and a lot more convenient.

Contactless payment systems are both fast and easy for consumers making transactions at the terminal. In a recent report from Apple, it was stated Duane Reade and Whole Foods are the brick-and-mortar retailers that have the highest percentage of contactless payments using ApplePay. The other major retailers mentioned are grocers, coffee shops as well as quick service restaurants. This shows that consumers are seeking ways to avoid waste of time as they run their errands daily. For businesses, ensuring that the lines move quickly is a great way for improving customer experience.

Thus, apart from providing stronger data security for customers, contactless payments also help them save time. These benefits make it more convenient for smartphone owners to use e-wallets to do transactions.


Mobile payment systems are growing in popularity with smartphone owners, who seek innovative ways of avoiding waste of time and stress when making transactions.  Contactless payments have improved digital wallets, such as Apple Pay, Android Pay, Google Wallet, Samsung Pay, etc. by providing users with more convenience in making in-store payment and offering them robust data security.  


This site uses Akismet to reduce spam. Learn how your comment data is processed.