Cashless payments are now widely established, as a current study shows. However, one is not always immune to pitfalls. What is important when it comes to digital payment.
The trend towards less cash has been apparent for some time, but the corona pandemic has accelerated the development enormously. In the meantime, the technical possibilities of the future have arrived and, in addition to paying with your bank card, the watch or mobile phone have also become a reality as a source of money.
A recent Bitkom study shows that in the third quarter of the year, 90 percent of citizens made contactless payments at least once, and half of the country uses the option much more frequently (several times a week). 46 percent of Germans use their mobile phone or smartwatch, with 74 percent of 16 to 29 year olds using it.
In order to be able to pay with a smartphone or smartwatch, the respective end device must have an NFC chip. NFC stands for Near Field Communication and describes the function of the chip, which can communicate wirelessly with authorized recipient devices. Not all cell phones have such chips, but in principle many Android smartphones since 2012 and iPhones from the sixth generation are equipped with NFC technology.
Activation works differently depending on the device and operating system generation. Simply searching for “NFC” in the settings will do the trick in most cases. In principle, the account of a payment app such as Apple Pay, Google Pay or, in the meantime, many banking apps must be coupled with NFC technology. However, banks in particular sometimes need a little time for their apps to deliver updates for the latest hardware generation.
Although the NFC standard is now ten years old technology, in most cases it works smoothly and has proven itself over the years. As the two NFC devices communicate with each other, a code is generated that encrypts the communication and cannot be copied. What is “said” stays under the customer’s smartphone and the supermarket checkout, so to speak. The NFC function is now also often the standard for bank cards.
In order to protect yourself from possible misuse, the consumer advice center advises keeping NFC-enabled bank cards in a protective cover that makes unwanted radio communication impossible. With smartphones and smartwatches, you have the option of having to authorize payments by PIN, fingerprint or FaceID, or to set an upper limit for payments. However, because communication only takes place in close proximity and is also automatically interrupted as soon as more than two NFC chips communicate with each other, the technology is very difficult for criminals to abuse.
(This article was first published on Tuesday, November 01, 2022.)