Especially during the time of the coronavirus, citizens were called upon to avoid paying with cash if possible. Thus, the use of the EC card for purchases has risen sharply in recent weeks.
Even at market stalls, the places where people could only pay with cash, card payment is now possible. Although the trend towards cashless and contactless payment existed already before, it was accelerated considerably by the crisis. Girocard transactions rose by 41.5% from 2017 to 2019. The proportion of cash payers fell from 38 % to 18 % during the pandemic. (Source: German Banking Industry). However, as viruses and bacteria are also accumulating on card terminals, the trend is moving directly towards contactless payment.
Types of mobile payment
There are various options for cashless payment. The classic EC card payment is one of them. The newer cards are equipped with an interface that makes contactless payment possible. An advance in cashless payment is payment via an app. This technology even works without an EC card. ApplePay and GooglePay were the pioneers, and many banks now offer their customers a similar app.
How does contactless payment work?
All payment options have one thing in common, they work with a technology called NFC. NFC means Near Field Communication and only works over a very short distance. The chip is built into all newer smartphones and can also be found in banks’ EC cards. To use it, you have to activate the interface on the phone – EC cards are permanently active.
When the chip is activated and connected to a payment app, you just place the smartphone on the reader and the data transfer begins. Due to the very short distance, it makes payment much more secure than it would be with Bluetooth, for example.
What are the advantages of mobile payment?
The biggest advance is, of course, that you don’t have to carry cash with you, just the smartphone. The technology makes it possible to pay quickly, securely and without entering a PIN. It is also a very hygienic form of payment, as you no longer need to touch any coins, notes or devices except your own smartphone.
What about security?
According to a test conducted by Stiftung Warentest, all payment apps score well. The apps are often even more secure than payment by credit card because the data is secured with a deputy number during transfer. Even if someone were to get hold of the data, they would not be able to use it.