The difference between cardless and contactless transactions

a-cellphone-tapping-an-eft-terminal-making-a-contactless-paymentThe different payment methods currently available can confuse customers and retailers alike. Cashless, cardless, contactless, frictionless, P2P, M2M; the list goes on. It seems that there’s a new language we have to familiarise ourselves with before we can start to enjoy these innovative emerging payment alternatives. But before we get ahead of ourselves, let us start with the two payment methods that are most commonly confused.

Namely, contactless and cardless payments.

We’ve written about these types of payments before, but for the benefit of the uninitiated, let’s set the record straight once and for all.

Cardless payments

The term “cardless payment” can be a misnomer. You may not need to have a card in your hand for the transaction, but a debit or credit card is required during the initial setup. Cardless payments is an umbrella term for transactions that don’t require the physical presence of a bank card. Some examples include:


You need to have a valid debit or credit card to sign up as an Uber user and transactions are deducted from the associated bank account. However, after signing up, you don’t need your card again. The Uber app stores your encrypted card data and uses tokenisation to bill you for every trip you request automatically.


PayPal started as a small online payment and money transfer service provider and has grown into a global giant. One of the ways PayPal users can access their money is via a mobile wallet that they can use to pay at participating retailers. But unlike most mobile wallets, it doesn’t use contactless technology (more on that later). It relies, instead, on generated quick response codes, or QR Codes, to carry out purchases in-store. Users who have the PayPal app on their smartphones can also shop online and authorise payments via PayPal at the touch of a button. They never have to leave their browsers or shopping apps.

Contactless payments

Contactless payments use Radio Frequency Identification (RFID) technology to transmit payment information between two devices (or between a card and a device) embedded with microchips when they’re brought within 4cm of each other. It’s colloquially called the “tap-and-go” method, even though the two transmitting devices don’t have to touch for transactions to be successful. Here are some examples:

Most mobile wallets

Thanks to the standardisation of Near Field Communication (NFC) functionality on the latest smartphones, consumers can pay by using their mobile wallets. Apple Pay, Samsung Pay and Android Pay are some of the popular mobile wallet choices. Smartphone contactless transactions give consumers (digital natives, especially) permission to leave their wallets at home and still pay for all the goods and services they need. No wonder more startups are cropping up as the contactless market grows.


The beauty of RFID technology is that you can embed microchips into almost anything, including items of clothing and accessories. Apple Watch and Samsung Gear watches are both equipped to make payments through Apple Pay and Samsung Pay, respectively. There are also payment rings like the one released by Kerv last year, payment sunglasses and even payment jackets like the one Lyle & Scott designed in partnership with bPay.

Why does it matter?

Contactless and cardless payments aren’t always mutually exclusive, which is why it’s important to make these two clarifications. First, some payments (such as the ones done using most mobile wallets and wearables) are technically both cardless and contactless. Secondly, contactless payments can be made with bank cards too. This is all important because if you’re planning to start accepting these forms of payment, you need to know exactly what is available to meet your retail business’ needs. Most importantly, you need to be able to explain to your customers what the differences and similarities are between these payment methods. Because believe or not, they’ll assume you can talk the talk.

Should you decide to start accepting contactless payments, you will be pleased to know that all of our EFTPOS Verifone devices support contactless payments. To learn more about our EFTPOS products, proceed to the brochure below.