How does contactless work?

Hannah Conway
12.02.20
5 minute read

Contactless payments are a lightning-fast, easy way to make payments with your debit card or even your mobile device in shops, restaurants and many other places.

In this article, you’ll find all the information you need to get started with contactless. Once you tap and pay for the first time, you won’t go back!


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Contactless payment: how does it work?

It couldn’t be simpler to make a contactless payment. All you need to do is tap or wave a contactless debit card over a card reader terminal, wait for the beep and the payment will be confirmed. The terminal looks just like any other card reader used for Chip and PIN payments, except that you’ll see the contactless payment symbol matching that on your card. This indicates the spot where you should tap or wave your card.

You can also make contactless payments using:

  • Smartphones and smartwatches if you have a mobile wallet – more on that later.
  • Fitness trackers.
  • Wristbands.
  • Key fobs.
  • Stickers.

The technology behind contactless payment is pretty smart. It makes use of radio frequency identification¹ (also known as RFID) to secure a connection between the chip inside your contactless card and the terminal. When you pay with a mobile device, technology called near-field communication (NFC) is used to create the connection between device and terminal.

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  • Only pay a low, transparent fee for converting currencies.
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Contactless payment by mobile phone

You’re up to speed on how contactless cards work, but what about using your mobile device? Yep, you can pay for things just by waving your smartphone or smart watch over a card reader.

All you need is something called a mobile wallet, such as Apple Pay or Google Pay. When you use one of these virtual wallets, your phone effectively takes the place of a physical debit or credit card. You simply download the app compatible with your smartphone, so Google Pay for Android devices, Apple Pay if you have an iPhone, Samsung Pay for Samsung devices and so on. Once you have the app, you can store your card information within it.

When the time comes to pay for something, you can just tap your phone on a digital payment-enabled terminal. Contactless mobile payments work in just the same way as using a contactless card – instantly, securely and conveniently.

How to recognise contactless devices

If you’re ever unsure whether you can pay via contactless, just look out for this symbol. It’ll be displayed on your debit or credit card if it’s contactless-enabled, as well as on the card reader terminal at the till. Tap your card where you see the symbol, and that’s all there is to it.

Where can I use contactless?

Contactless is hugely popular worldwide, accepted at participating shops, supermarkets, bars and restaurants, as well as public transport hubs, petrol stations, car parks, toll booths and vending machines. You may even be able to pay for your taxi ride via contactless, depending where in the world you are. Just look for the symbol, or ask the vendor if they accept contactless payments.

transferwise-debit-mastercard-spend-around-the-world

Contactless payment limit

There is a limit to how much you can spend per contactless transaction. This varies depending where in the world the card was issued, and by which bank or card provider. For example, in the U.S. the limit is between £15 and £20 per transaction, whereas in China and Japan it is over £100².

For cards issued in the UK (i.e. by Visa or Mastercard), the limit for a single contactless payment is £30. If you want to buy or pay for something that costs more than this, you’ll need to use Chip and PIN.

How many times can you use a contactless card in a day?

For most debit and credit cards, there’s no daily cap on how many contactless transactions of up to £30 a time you can make, or equivalent in the country you are visiting. However, you may be asked to enter your PIN after you’ve made lots of contactless payments in a 24-hour period. This is a fraud-prevention initiative designed to check that it’s still you making the payments.

If you’re using your TransferWise debit Mastercard for contactless payments, there is a daily and monthly limit to the amount you can spend. But don’t worry, it’s quite generous so should cover all of your spending needs. You can spend up to £1,000 a day (this can be set at a default of £500 if you prefer) or £4,000 a month using contactless.

Can contactless payment be declined?

Just like with a normal Chip and PIN transaction, your contactless payment can be declined if you don’t have enough money in the bank to cover the amount.

It may also be declined if you’ve used contactless many times during the same day. This is an anti-fraud measure, one that can cause minor inconvenience but it’s for your own security. All you’ll need to do is enter your PIN and your bank will know it’s you. You can then carry on spending using contactless.

Situations like this act as an important reminder not to forget your PIN. It’s more common than you may think now that contactless is so popular, but you’ll need that essential 4-digit code to prove your identity, as well as making payments over £30. With alternative providers, like TransferWise - you can usually check your PIN via their app whenever you need to.

Is contactless safe?

It’s only natural to worry about security with a technology such as contactless payment, where a PIN isn’t needed.

But you don’t need to worry unduly, as contactless payments are made using secure encryption technology. If someone steals your card, they can in theory make limitless contactless transactions of £30 a time. This can be distressing, but fraud protection from your bank should mean that you’re refunded in full³.

What’s more, your bank or card provider will block the card as soon as you report it stolen. If you don’t realise for a little while, the fraudster may still be stopped in their tracks by the intermittent PIN checks on multiple transactions.


Contactless is an easy, mega convenient and secure way to pay for everyday purchases, from your groceries to your bus fare. Combine these benefits with the low-fee, real exchange rate, multi-currency spending of the TransferWise debit Mastercard and you can save - wherever you decide to be.

Sources used:

  1. Money Supermarket: Contactless Payments
  2. Payments Card and Mobile: Contactless Card Limits
  3. Money SuperMarket: Contactless Payments FAQ

Sources checked on 11-February 2020.


This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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