Just one tap: A guide to payWave and PayPass

By Mozo ·

First it was the smart phone, now it's the smart credit card! Visa payWave and MasterCard PayPass are increasing in popularity, as merchants and customers desire faster transactions.

Of course, with every new technology there is a fear of the unknown. The Mozo team has researched this new way of purchasing to bring you the facts about Visa payWave and MasterCard PayPass credit cards. Here is the low-down:

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How it works

If your MasterCard or Visa credit card is due to expire, and you're waiting for your new card to arrive, it's most likely going to include either the payWave or PayPass payment feature. These credit cards have an embedded near-field communication (NFC) chip, which can transmit your card's info wirelessly which allows you to "tap and go."

The contactless payment is enabled through a radio antenna embedded in the credit card, which sends radio frequencies to the terminal. Most new credit cards that come with the payWave or PayPass don't allow you to deactivate the feature but you can still make purchases with a signature or pin.

At the moment most retailers offer payWave or PayPass, such as McDonald's, 7-11 and JB Hi-Fi. All the NFC chip credit cards we looked at have a maximum purchase limit of $100 with payWave and PayPass. So it's perfect for those small groceries at the shop!

It's pretty simple to use, you just tap or hover your credit card above the terminal and the transaction is processed. You don't have to select savings, cheque or credit as the transaction will automatically be charged to your credit card. You'll know if the transaction has gone through by the illuminated light and a display message will appear across the screen confirming the sale has gone through.


Using a payWave or PayPass credit card is a fast way to shop because you don't have to swipe or insert your credit card in a traditional POS terminal and there's no pin or signature required. There is also the added security of not having to hand over your credit card to the teller. Nothing is worse than leaving your credit card on the counter and coming back to find that it has vanished!

Another benefit is that you don't have to carry cash around with you. Gone are the days of fumbling around for change or holding up long queues as you sign for your morning coffee!

What about security?

Although you can make a contactless payment with up to 4cm reach, most credit card companies require you to tap your credit card for the transaction to go through, ensuring you don't pay for another person's sale. Even if you do accidentally tap your credit card twice on the terminal, you won't be charged because every transaction generates a unique authentication code which cannot be used again.

The wireless technology can be concerning because no pin or signature is needed for a sale to be processed. Not to fret - all NFC cards use the latest chip technology, which come with secure encryption (cryptographic key) technology to protect you from thieves who might try to 'scan' the wallet in your pocket.

There's not much stopping a thief from hitting up the shopping centre with purchases under $100 at different outlets but as with other payment methods (e.g pin, signature), most credit cards provide a zero liability policy. This means that you will be covered for any unauthorised transactions, with 100% reimbursement. Some providers state that you must notify the institution immediately in order to get your money back.

Transaction fees

Although some payWave and PayPass credit cards have standard transaction fees, you won't be charged extra for using this method of payment.


Many payWave and PayPass credit cards have exclusions on usage. Usually cash advances and payment for traveller's checks are not allowed. Also, you can't pay off a bill at the bank or post office using payWave or PayPass.

The future of smart credit cards

Smart credit cards are a new way of purchasing, and the number of Visa payWave and MasterCard PayPass credit cards are increasing. In the next few years most credit cards will have this payment option and NFC terminals will be rolled out in more and more retail outlets.

This is just the beginning, with so many new technologies being released to make life easier for the savvy shopper or everyday buyer. The next generation of smart phones are being developed, with features allowing you to "tap and go" with your smart phone. The iPhone 4 and above already give you the option to make a contactless payment with an iCarte case, which you can purchase from the Commonwealth Bank app Kaching.

With all these new credit card technologies it's good to know what it's all about. Say Goodbye to your wallet and hello to the future!

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