A guide to contactless phone payments

Gone are the days of carrying cash or even swiping a card to make a purchase. In today’s digital-first world, contactless phone payments have revolutionised how people shop.

This article includes tips, suggestions and general information. We recommend that you always do your own research and consider getting independent tax, financial and legal advice before making any important decision.

Shoppers are using their phones to make payments more often than ever. Contactless purchases are expected to increase annually by an average of 23% worldwide, exceeding more than 522 billion purchases by 2026.¹

So what exactly is a contactless phone payment? This guide explores how they work, when they might come in handy, and safety considerations.

How contactless payments work

Many of us know the feeling of standing at a checkout line, fumbling through our wallet to find the right card or counting up the cash needed for a transaction.

But with contactless phone payments, you can complete transactions using your mobile phone as a payment tool.

With various contactless payment methods available, here’s a breakdown of how you can pay with your phone:

• Digital wallets. Digital wallets allow you to store your payment information securely on your phone. When you're ready to pay, you hold your phone near the payment terminal with your digital wallet open, and it communicates wirelessly with the terminal to transfer the payment information.
• QR code payments. This is where you scan a code displayed by the merchant using your phone's camera. Once scanned, you confirm the payment on your phone and complete the transaction.
• Tap to pay. Tap to pay is a method similar to using a digital wallet. Instead of holding your phone up to the terminal, you simply tap your phone on the terminal.

Contactless phone payments utilise near-field communication (NFC) technology, which allows two devices close to each other to transmit data wirelessly.

When do contactless phone payments come in handy?

Whether you’re in a hurry or simply looking for an easy way to pay, using your phone to pay can provide a fast, secure, and convenient way to complete transactions on the go.

Here are some potential benefits of using contactless phone payments:

• They’re efficient. With contactless phone payments, there’s no need to carry cash or cards. Instead, all you need is your phone, which you likely already have with you.
• Transactions are fast. Contactless payments are generally quick, making it an easy way to pay for purchases in just a few seconds.
• You can take advantage of real-time tracking. Many contactless payment methods allow you to view your transaction history and keep track of your spending in real time.
• They’re widely available. Contactless payment methods are widely accepted at major retailers, restaurants, and other businesses.

Yes, contactless phone payments are generally safe. Because payment information is stored on your phone and transmitted wirelessly to the payment terminal via NFC technology, you don't have to worry about someone stealing your physical card or cash.

Plus, many contactless payment methods use advanced encryption and authentication to help keep data safe.

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