How to Use Tap to Pay

Tap to pay is a quick, convenient way to pay for everything from groceries to movie tickets using your smartphone or a contactless card. Read on to learn more about tap to pay.

What is tap to pay?

Tired of digging through your wallet for your debit card? With tap to pay, you hover your smartphone or wearable device over a screen at a checkout terminal to make a “contactless” payment. Your device must have an app that stores your credit card or bank account information.
 
You can also tap to pay with most plastic debit and credit cards, and it works the same way. Rather than inserting your card into a reader, you simply hold it above a checkout screen.

How does tap to pay work?

Tap to pay uses near-field communication (NFC) technology. This technology is similar to wifi or Bluetooth but creates a much smaller, low-frequency radio field.
 
When you hold your NFC-enabled card, smartphone, or wearable near a payment terminal at your local drug store, the terminal produces a tiny radio field. The appropriate payment then transfers wirelessly (traveling via that field) from your account to the drug store.
 
Some merchants offer the option of using your digital device to scan a unique quick response (QR) code, which is like a bar code. You open your device’s camera, then center the QR code within the camera’s frame. A pop-up banner or window may appear, which you click to complete your transaction.

Is it safe?

Tap to pay is generally more secure than physically swiping a payment card, but there are still risks.
 
Pros

• Your financial account information is stored in a secure area of your device, sometimes called the “secure element.”
• You don’t physically insert a card, so a cybercriminal can’t use a credit card skimmer to steal your card information.
• During the transaction, your card creates a secret code. When you tap to pay, your payment data transforms into an encrypted one-time identifier called a “token.” The merchant receives the token instead of your sensitive financial information. The merchant then provides the token to the payment processor to complete the transaction. This happens quickly, and your financial account information wasn’t exposed.
• It’s difficult for criminals to grab your financial data from the air. NFC uses a tiny radio field — just a couple of inches — so you must point your card or device directly at the payment terminal. A scammer would need to be standing uncomfortably close to capture your data. If they did capture it, the data would be encrypted and likely useless to them.

Cons

• Digital payment app companies aren’t necessarily required to comply with the same regulations as financial institutions, potentially leaving you vulnerable to scams. Also, the Consumer Financial Protection Bureau plans to reduce its oversight of digital payment services. Consumer Reports recently evaluated several popular payment apps — Apple Wallet, Google Wallet, Samsung Wallet, Cash App, PayPal, and Venmo — and all have strong security during transactions. However, evaluators found inconsistencies in privacy and protection when users kept a balance in some apps. Consumer Reports shared its observations with the app companies, who are working to resolve issues.
• A hacker could infiltrate a payment terminal to reprogram it and capture your personal data. Tap to pay terminals use secured networks, however, so this scenario is unlikely.
• A hacker may intercept a transaction if your device isn’t secured. A hacker may intercept a transaction if your device isn’t up-to-date with the latest software.
• A merchant could charge you the wrong amount. This tends to happen by accident, not by intention. When swiping your card or device, the payment amount will appear on the merchant’s screen, so pay attention.

To protect yourself, keep your device updated with the latest security patches. Also, turn on transaction notifications so you’ll receive alerts of suspicious activity. To do this, tap each bank or payment app you use, then switch on “Notifications” or “Allow Notifications.”
 
Another smart move is to avoid storing money in payment apps that aren’t associated with a financial institution. Your credit union or bank accounts are federally insured up to $250,000. Money stored in a non-bank app is not federally protected.

A popular way to pay

At grocery stores, 85% of purchases are now contactless, according to Forbes. Tap to pay also makes up 39% of pharmacy purchases, 38% of retail purchases, and 36% of retail purchases.

Tap to pay symbol

When visiting any merchant, look for signage or payment terminals displaying an icon that resembles a wifi signal, with four curved lines. That symbol means that you can tap to pay.

Of course, you must also have an NFC-enabled debit or credit card, smartphone, or wearable device. To find out if your debit or credit card is compatible, search the front and back of the card for the contactless icon. Most newer iPhones, Android smartphones, and wearables are NFC-enabled.
 
Before using tap to pay, you may need to turn on your device’s NFC capabilities. On an Android phone, go to Settings, then tap “NFC” or “NFC and contactless payments” to turn on NFC. On an iPhone, go to your Settings, tap “Wallet & Apple Pay,” and scroll down to find “NFC scanning,” “NFC tag reader,” or “Apple Cash.” Turn on to enable payments.

Contactless cards

If your debit or credit card displays the contactless icon, you can tap to pay.
 
When making a purchase, hold your card close to the payment terminal’s screen for a few seconds. It doesn’t matter which side of your card is facing down. Most payment terminals emit a signal when your transaction is complete.
 
Need cash back? Depending on the merchant, you may be able to get cash back when using tap to pay with a contactless debit card. (You may need to enter your PIN to identify yourself.) Some retailers who offer cash back may restrict it when using self-checkout or in other circumstances. You can’t get cash back with most contactless credit cards.

Contactless payment apps

To use your smartphone or wearable, you must first download a digital payment app. That might be your bank or credit union’s app, an app such as Apple Pay or Google Pay, or an app from a retailer you use, such as your coffee shop.
 
Begin by downloading the app. (Some may come preloaded; iPhones come with the Apple Pay app installed.) Then open the app and follow the prompts to register and connect the app to an account, such as your checking account.

Are there fees?

The customer doesn’t usually incur a fee, but the merchant pays a fee for any credit card transaction, including tap to pay transactions. Some merchants pass that fee along to the customer. However, the tap to pay fee would be similar to the fee you’d pay if you inserted your card into a reader. If you have a favorite local business, you may want to ask them if they pass on a fee.