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Credit Card Technologies

Credit card innovations that have revolutionised the way we pay on plastic.

From making purchases and paying bills to keeping your credit card safe, these are the credit card innovations that have changed the way we pay on plastic.

generic credit cards

What do the numbers on a credit card mean?

What is a CVV number?

On all cards, the CVV number (Card Verification Value) is the three-digit (Visa and Mastercard) or four-digit (for American Express) security number that is usually on the back of your card. However, American Express usually places the CVV on the front of the card.

The difference between magnetic stripe, chip and PIN-protected cards

credit card magnetic stripe
Magnetic stripe

The stripe on the back of your credit card is a magnetic stripe (otherwise known as the magstripe). Made up of iron-based magnetic particles, the acquirer checks the magstripe for the card’s merchant ID, valid card number, expiration date, credit card limit and card usage. Most EFTPOS terminals accept chip payments, so the magnetic stripe is usually just included as a backup if you want to use the card overseas.

credit card chip
Chip and PIN

As well as storing your card information, the chip uses cryptography to protect your secure data when communicating with the card reader. These payments also require a four-digit PIN for authorisation, making them a more secure option than the magstripe.

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Contactless payments

NFC (Near Field Communication)

Near Field Communication refers to the technology that allows us to use our smartphones for contactless payments. Once the NFC chip in your smartphone is activated by another chip (such as the contactless terminal), data can be transferred between the two devices when held a few centimetres away from each other.

tap and goTap and go

All new credit cards are now equipped with NFC contactless payment technology (such as Visa’s payWave and Mastercard PayPass). Hold your card within 4cm of a PayPass or PayWave terminal, and you can approve payments of $100 or less without entering your PIN.

Using NFC technology, every transaction generates a unique code that prevents you from being incorrectly billed and encryption data protects your finances from fraudulent activity. All new credit cards come with credit card technology and 59% of Aussies use it to make purchases.

mobile contactless paymentMobile contactless payments

Mobile contactless payments use the NFC chip that is in your mobile to make payments at contactless payments. In Australia, you can use Samsung Pay, Google Pay and Apple Pay to make mobile payments in the same way you would usually tap and go.

Rather than storing the information on your phone, a Device Account Number is assigned to your phone, encrypted and stored in the Secure Element (a dedicated chip in your device). When you make a purchase, this Device Account Number as well as a transaction-specific dynamic security code will approve the payment.

cardless cash withdrawal at atm

Cardless cash

You can now withdraw funds from your credit or debit account without your card. Referred to as cardless cash, you usually need to use the relevant mobile banking app, select the chosen account and enter how much you want to withdraw. The app will then generate a cash code that you can use at the ATM to withdraw cash.

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Apps and online account management

You can now manage your entire credit card or debit card account online. You can use credit card bank apps and online accounts to:

  • Transfer money.
  • Make contactless payments.
  • Withdraw with cardless cash.
  • Lock and block your card.
  • View your balance and transaction history.
google play

Google Play payment methods

As well as online banking with your bank, you can set up automatic credit card repayments through your Google Play account. You just need to go to Payment methods, select "add a credit or debit card" and fill in your information to make purchases or schedule automatic payments.

International innovations

Combine your payments

plastic cardCurrently only available in the US, products such as the Plastic card are an example of a smartcard that can be used to combine all of your accounts (from debits cards, credit cards, gift cards and more) on the one card. Equipped with a touch screen on the card, you enter a security screen and then swipe left or right to select the card you want to use. You just use the Plastic app to enter the details of the cards you’d like to use. So on the one card, you could redeem a gift voucher, make a big ticket purchase on your credit card and withdraw cash from an ATM with your debit card.

If you lose the card, you can use the app to lock it and wipe your card and then resync it if you find the card again.

Put a ring on it with the Visa-powered payment ring

Visa FRID Payment RingDuring the 2016 Rio olympics, US athletes were gifted with a variety of Visa-powered wearables including the sweat and water-resistant Swatch Bellamy wearable watch and a Visa-based payment ring to make contactless payments. These wearables used NFC technology to make payments in the same way your PayWave-enabled card or mobile would.

The Visa-based payment rings are no longer limited to medal winners, though. For AUD$53, anyone can now pre-order an NFC ring that lets you tap and pay at any Visa paywave terminal in the US. As with an Apple Watch, you won’t need your phone to make the payment. Instead, the device uses anonymising tokens to make the payments itself. With Australia leading the charge in contactless card payments, these technologies are sure to make their way down under before we know it.

Image: Oliver Hoffmann / Shutterstock.comTwin Design /

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