How to Make Contactless Payments with Your Phone?

Making payments by simply holding your phone close to a POS device, without carrying a wallet, has become one of the most practical solutions in daily life. Thanks to contactless payments via phone, NFC technology, mobile payments, and digital wallet applications, it is possible to shop securely within seconds. In this Papel Blog article, we will answer questions such as how contactless payments work, which devices support them, and why they are becoming increasingly popular in Türkiye.

What is contactless payment by phone?

Making a payment by holding a smartphone close to a POS device without carrying a physical credit or debit card is one of the most widely used contactless payment methods. During this process, which is enabled by NFC technology in smartphones, secure communication is established between the device and the POS within a few centimeters, and payment information is transmitted instantly.

To use this payment method, it is sufficient to add a card to a digital wallet or mobile wallet application. For example, Papel Wallet allows cards to be securely stored within the app and enables the phone to be used like a contactless card. Once cards are added to applications, the phone can function just like a contactless card. With phone-based contactless payment supported by both Android and iOS devices, it is possible to make fast and hygienic purchases at many locations, such as markets, restaurants, and public transportation.

Difference between mobile payment and contactless payment

Although mobile payment and contactless payment are often confused with each other, they are different despite having similar aspects. Contactless payment refers to a physical payment made without touching the POS device, using an NFC-enabled card, phone, or smartwatch. In other words, contactless payment by phone is a subcategory of mobile payment.

The concept of mobile payment is broader. It includes various payment methods such as NFC payments, QR payments, in-app payments, online card transactions, and payments made through digital wallets. For example, the inclusion of contactless payments via phone among Papel’s contactless payment solutions can be shown as an example. Therefore, while every contactless payment can be considered a mobile payment, not every mobile payment is contactless.

Requirements for making contactless payments

Several basic requirements must be met to make contactless payments by phone. First, the smartphone must support NFC technology, and this feature must be activated in the device settings. Contactless payment cannot be made on phones that do not support NFC. Next, the credit or debit card must be contactless-enabled and added to a mobile wallet application, that is, a digital wallet. After the card is added, the phone works just like a contactless card. The POS device at the store where the contactless payment will be made must also support NFC; otherwise, contactless payment by phone will not be possible. When all these conditions are met, users can make fast and secure payments simply by holding their phone close to the POS device, without carrying a physical card.

What is NFC technology and how does it work?

NFC, which stands for Near Field Communication, means near-field communication and enables secure data transfer between devices over very short distances. When a contactless payment takes place, NFC establishes communication between the phone and the POS device via radio frequencies. At the point of payment, the POS terminal sends a signal, and when the phone is held a few centimeters close, it detects this signal. Card information stored in the digital wallet is transmitted to the POS device in encrypted form and verified instantly. This process takes place within seconds and is both hygienic and practical since no physical contact is required. Thanks to NFC technology, the phone can behave like a contactless card, allowing users to shop easily without carrying cards.

Contactless payments on Android and iOS devices

Making contactless payments on both Android and iOS devices is quite easy.
On Android devices, it is sufficient to activate the “NFC and Contactless Payments” option from the Settings menu. After enabling NFC, a card must be added to a mobile wallet application. During payment, keeping the phone’s screen unlocked and holding the device close to the POS is enough for the payment to be completed.

On iOS devices, NFC is generally enabled by default, so no additional settings are required. Only authentication via Face ID, Touch ID, or passcode may be required at the time of payment. In short, on both operating systems, having an NFC-supported phone and adding a card to a digital wallet is sufficient to make contactless payments.

Things to consider for secure contactless payments

Although contactless payment (NFC payment / mobile payment) is generally a fast, practical, and secure method, there are some points to consider. First of all, after adding a card to a digital wallet application, it is necessary to activate the phone’s screen lock (password, PIN, biometric lock, etc.). This helps prevent unauthorized payments. For example, Google Wallet documentation emphasizes that the phone must be unlocked to make NFC payments.

In addition, it is important to make contactless transactions only at secure and familiar POS terminals and to be cautious in crowded environments. Before holding the phone close, one should ensure that the POS device is actually a store or checkout terminal. Moreover, digital wallet and bank card information should be protected with up-to-date and strong passwords.

Another important point is that during contactless payments, card information is not directly shared with the POS device. Especially in systems like iOS (Apple Pay), instead of the actual card number stored on the device, a “Device Account Number” and one-time security codes are used, which helps keep card information secure.

Finally, regularly updating the phone and digital wallet applications and using biometric authentication (Face ID, fingerprint, etc.) whenever possible makes mobile contactless payments both practical and secure.

Contactless payment usage rates in Türkiye

The usage rate of contactless payments in Türkiye has gained significant momentum in recent years. In 2020, the number of contactless transactions increased by 244%, while transaction volume increased by 492%. During this period, it was observed that one out of every four card payments was made contactlessly. Studies covering the 2020–2023 period show that mobile contactless payments have increased rapidly, and consumers have become accustomed to this method. The widespread use of digital banking is also one of the factors supporting contactless payments. All this data reveals that contactless payment will become a much more widespread and standard payment method in Türkiye in the future.

 

Sources: 1, 2.  

 

This blog post contains general information, not legal, financial, or investment advice. The content is prepared for informational purposes only, and you are advised to seek professional advice for your specific circumstances. The expressions in this article do not carry any binding nature or responsibility and reflect only the author’s evaluation. All your decisions are your responsibility, and Papel Electronic Money and Payment Services Inc. accepts no liability for any consequences arising from them.