Credit card companies attempt to attract customers with their credit card offers such ascredit cards with 0% interest charged on balance transfers or rewards for purchasing with their card. When it comes to paying by card in a shop, there are also a couple of different options available. Most commonly, you will be asked to pay by Chip and PIN but increasingly contactless payment is also being used. What is the difference between these two options?
How does Chip and PIN work?
Chip and PIN is currently the most common form of payment method when you use your credit card in a retailer. They have become popular over the last few years and they work by inserting a credit card with a chip in it into a machine. You are then asked to enter your PIN, or personal identification number, which is what authorises the payment.
This payment method was designed to speed up the old method of signing for your purchases and also worked to make it more secure.
How does contactless payment work?
Contactless payment is a more recent development when it comes to making credit card payments and it works exactly as the name suggests. Again, you need a credit card with a special sort of chip in it, which you then hold over a sensor of a contactless payment machine and your payment is then made.
The aim of it is to speed up the process even further so if you are in hurry, you can still make purchases without having to wait as long for your payment to process. Currently, this method of payment is only available in certain places and for relatively small amounts of money, but it is kept secure by the fact that you will still be asked to enter your PIN from time to time to make sure you are authorised to use the card.
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