Will the current health crisis change our payment habits for good? Since the World Health Organisation stated in March 2020 that there was some risk of being infected through the exchange of coins and notes, contactless payments by bank card and mobile phone have become the ultimate hygiene measure against the coronavirus. Since then, such payments have surged. But what does this new payment method consist of exactly, how does it work and what solutions are on offer?
Contactless payment systems are based on NFC (Near Field Communication). This short-range, high-frequency, wireless communication technology combines an integrated chip and antenna, and enables the exchange of information between devices up to 5 centimetres apart. All you have to do is hold your bank card, mobile or smartwatch over a payment terminal in the store to instantly pay for your purchases. The system is practical and secure: no need to enter a code, provide change, or touch the payment terminal when inserting your card or the buttons to enter your secret code.
There are two types of contactless payment: by bank card and by smartphone (or smartwatch). In Luxembourg, all the major banks provide bank cards (credit cards and VPAY debit cards) equipped with NFC technology. If you do not wish to use this feature, shown by the contactless pictogram, you can ask your bank to deactivate it. The contactless bank card is mainly used for small purchases with a limit that until a short while ago was EUR 25. Since 1 April, this limit has been increased to EUR 50. However, consecutive cumulative contactless purchases may not exceed EUR 100. You must enter your PIN above these two limits.
Mobile payment enables you to pay larger amounts, with similar limits to that of your credit or debit card, and offers additional features. There are several solutions on the market. The most popular in Luxembourg at the moment are Apple Pay, Google Pay, Samsung Pay and ING Payconiq. The first three work on the same principle: the credit card is digitised in the electronic wallet of the device or mobile telephone. The services offered are the same: you can make purchases in the same way as with contactless bank cards and pay instantly on applications and mobile sites, provided these are partners. The only notable difference lies in their compatibility: each solution only works with the products belonging to the same brand (Apple, Samsung) or using the same operating system (Android for Google), provided of course that these products are equipped with NFC technology. In addition, not all banks offer these mobile payment solutions. You are advised to check with your bank to find out which of these three first mobile payment solutions it is compatible with.
Payconiq is a mobile payment service offered by the country’s main banks that enables you to make purchases directly from your current account. It is relatively simple to use: after having downloaded the Payconiq application from your financial institution and linked it to your current account, you can make contactless payments in shops and restaurants, pay your bills without having to enter the reference, amount or beneficiary, and make purchases online and through apps without getting out your credit card. Just place your smartphone near a Payconiq terminal, scan the QR Code on the bill or choose Payconiq as a means of payment and approve the payment with your fingerprint or PIN code. You can even send money simply with the recipient’s mobile number: the money transfer is completed by bank transfer from your account to the recipient’s account.
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