Contactless Payments: A Complete Guide

Using a Contactless Card at a store
You’re in line at the grocery store, and you see someone turn their wrist over, holding their smart watch over the payment terminal for just a brief moment before their receipt prints and they are on their way. You may have wondered how those contactless transactions occur, whether they’re safe and even whether you should try it, too.

In this article, we break down contactless payments, which are not only more convenient, but are also more secure than swiping your card. Let’s take a comprehensive look at this new technology and the advantages it offers to you as a consumer.

What is a contactless payment?

According to a forecast by Juniper Research, contactless payment transactions are expected to see a whopping 221% increase between 2022 and 2026.1 Contactless payments can easily be made either through your digital wallet on your mobile device or via contactless technology embedded directly into your debit or credit card at the point of sale.

To make a purchase, simply hold your smartphone or card near the card contactless-enabled reader to complete your transaction. No swiping or inserting is necessary, your payment information stays secure, and you’re spending less time in the checkout line.

Where are contactless payments accepted?

Contactless payments are available at thousands of locations across the globe, from grocery stores, ATMs, and fast-food restaurants to your favorite local retailer. A study conducted by the National Retail Federation found 67% of merchants in the U.S. now accept some form of touch-free payment. Just look for the contactless symbol.

  using a southstate contactless card at a store

How does it work?

When you hold your card or smartphone close to the payment terminal, within seconds, the card information is transmitted electronically. Similar to EMV chip cards, a contactless payment shares a unique one-time code to communicate with the payment terminal to complete the transaction. Once the code is used, it cannot be used to make another purchase. After the payment has been accepted, you will receive an approval signal in the form of a beep, green light, or check mark.

Using Your Contactless Card

Icon for Using Your Contactless Card
Icon for Using Your Contactless Card

How do I use my contactless debit or credit card?

  1. Look for the contactless symbol on the back of your card and the merchant’s payment terminal. Both should display four curved lines in the corner, similar to what a sideways Wi-Fi symbol would look like.

  2. To make a payment, hold the card within one to two inches of the contactless symbol on the terminal.

  3. Once the payment is approved, you will receive confirmation in the form of a beep, a green light, or a check mark.

What are the advantages of using contactless payments?

Contactless payments provide many advantages. Using tap-to-pay technology provides a quicker way to pay with added security and convenience.


Contactless payments provide a level of protection that traditional magnetic stripe cards can’t offer. Where traditional cards transmit your name, security code, and billing information, contactless payments use a one-time encrypted code sent from the card to the terminal. Near-Field Communication (NFC) technology makes it extremely difficult for fraudsters to compromise and clone your information.


While chip cards have increased the security of card payments, they drastically slowed down checkout lines in retail locations. With contactless payments, you won’t have to compromise security for speed. Cutting payment processing time nearly in half, these payments enable consumers to get through the line faster and get back to your life


How do I use contactless technology using my digital wallet?

On your mobile device, you can store your debit and credit cards as a convenient and secure way to pay. This digital wallet brings an added layer of protection because a PIN, passcode, fingerprint, or facial recognition will be required before a purchase can be processed. To use your mobile device to make a payment, simply tap your smart phone or smart watch to use Apple Pay, Google Pay, or Samsung Pay wherever contactless payments are accepted. To keep your payment information secure, your transaction is encrypted and never stored.


Are there any risks associated with using contactless payments?

Contactless payments are both simple and convenient, but any time you use a debit or credit card, there is a possibility of fraudsters stealing your information. In the event that your card is lost or stolen, contact your bank or financial service provider immediately once you are aware of the theft or loss of your card. Federal law limits your liability for unauthorized charges depending on the type of card and when you report the loss.

For your protection, financial institutions and credit card companies typically place a limit on the amount that can be paid using the contactless payment option.

Are there any purchase limits associated with contactless technology?

Your contactless limit will vary depending on the institution that issued the card. Your purchase limit will typically be higher than your ATM cash out limit. Although touch-free payments are encrypted and secure, you may be asked to enter your PIN and/or draw your signature as an added security measure when making larger purchases.

Considering the convenience and security contactless payments offer, it’s evident this technology is going to increase in popularity both in the U.S. and worldwide. Once you learn how to use it, you will soon begin to wonder how you ever lived without it.

  • This content is general in nature and provided for informational use only. Content may be used in connection with the advertising and marketing of products and services offered by SouthState Bank, N.A. and its subsidiaries and affiliates. This is not to be considered legal, tax, accounting, financial or investment advice. You should seek individualized advice from personal financial, legal, tax and/or other professionals, as appropriate depending on the specific facts of your situation. We do not make any warranties as to the completeness or accuracy of this information and have no liability for your use of this information.

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