What Is Credit Card RFID Technology?

As more credit card issuers offer “contactless credit card processing processing”, a growing concern and discussion over RFID technology is generated. The RFID technology, or Radio Frequency Identification, allows a credit payment to be read without manual entry or physically swiping the card through a reader. Cards with RFID can be held up to a special reader and the information is transmitted via radio frequency.

How RFID Technology Works

There is a radio frequency microprocessor embedded in each card with the RFID technology. The chip can be read by a point of sale terminal with a special reader designed to retrieve the account information from the embedded chips.

The History of RFID

JP Morgan Chase introduced radio frequency credit cards in 2005, calling it “blink technology”. They had the option of being used like normal cards (swiped through traditional credit processing terminals in the checkout line), or using the radio frequency technology by waving it in front of a special reader for a contact-free payment.

Today, all issuers offer RFID technology cards, including MasterCard, Discover, VISA and American Express.

Benefits of RFID Sensors

The primary benefit of being processed with RFID technology is the convenience and speed of transactions. Instead of pulling a card out and physically swiping it through a reader, it can simply be held in front of the reader. To minimize accidental processing as people walk by readers, the card has to be within 4 inches of the reader.

Disadvantages and Security Concerns of RFID Cards

Despite it’s convenience and speed of processing, RFID cards have a number of disadvantages and greater security concerns than traditional credit processing means. With scanning devices that can be purchased online inexpensively, anyone can get access to the card’s details simply by walking by someone with an RFID card in their wallet or purse. The owner of the credit account will not have any indication that their card has been accessed by the scanner. Once the thief has the card information, they can theoretically use it to make purchases by phone or internet- or to have a separate card created with that information to use in swiped transactions.

Some RFID card issuers have created new security measures to make it more difficult or impossible for thieves to scan the information with unauthorized devices. According to Smart Card Alliance, contactless payments using RFID have additional security technology on both the card and the credit card processing network. For example, credit transactions processed online or by phone typically require the three or four-digit security card found on the back of a credit card; RFID card transmissions do not contain that information when the credit card details are transmitted from the card to the processing system. Individual credit card issuers also each have additional layers of security added to their RFID cards.