Ask the Expert: Three Ways to Pay

As Chief Operating Officer, Hans Iverson oversees the Card Services and Information Technology departments. Read on for his explanation of the three different ways to pay with our new contactless cards.

Our newly-launched tap-to-pay Visa® Debit and Credit Cards now give you three ways to make a purchase: swiping, inserting and tapping. You’re familiar with the first two, but tap-to-pay, or contactless pay, may be new to you. Many people are often hesitant to adopt a new technology, which is why I want to take this opportunity to explain why contactless pay is faster and more secure than the other two methods of payment.


How it works: Tap-to-pay, or contactless pay, utilizes the technology near field communication (NFC), a short-range wireless connectivity embedded in the debit or credit card. This allows the card and card reader at the merchant to securely pass information with no physical contact, which eliminates the potential for counterfeiting the secure information on your card. Each transaction utilizes a technology called tokenization, which is the process of creating a unique number or “token” for each transaction. If a hacker somehow gets ahold of that token, it will be useless to them because they have no way to decode it.

Pros: It’s very secure and quick. Tap the card to the card reader, and your payment is processed in a matter of seconds.

Cons: Some merchants still do not accept this highly-secure form of payment, but luckily, you can still insert your card or swipe instead.

EMV Chip

How it works: Similar to contactless pay, when you insert your card into a chip reader, the chip and reader work together to make a token for that single transaction. Only a legitimate chip reader and legitimate chip card can communicate with each other.

Pros: The main benefit of using an EMV chip to pay instead of swiping is that an EMV chip is virtually impossible to counterfeit. Most merchants in the US who accept cards have payment terminals with chip readers.

Cons: These payments take longer to process than contactless payments at the point of sale.

Magnetic Stripe

How it works: Your card information is encoded in iron particles onto the black magnetic stripe on your card, and when you swipe it through the card reader, the reader scans it and the merchant collects your card information.

Pros: It is a good back-up option when making a purchase. Whether online or in store, you can shop with confidence.

Cons: Fraudsters have learned how to use skimmers and other methods to copy the magnetic stripe information and create duplicate cards. Your card information is entered directly into the merchant’s system, and therefore, it is more susceptible to security breaches. In addition, if the magnetic stripe is damaged, your card can become unreadable and the transaction fails.

Our TruStone credit & debit cards include Visa’s Zero Liability Policy

Visa’s Zero Liability* Policy is our guarantee that you won’t be held responsible for unauthorized charges made with your account or account information. You’re protected if your Visa Credit or Debit card is lost, stolen or fraudulently used, online or offline.

Hopefully this helps explain why you should opt for contactless pay when making transactions with merchants.

If you have any questions, please give us a call.


Editor’s note: parts of this article were sourced from Investopedia, NerdWallet, CreditKarma and Visa.

*Visa’s Zero Liability policy does not apply to certain commercial card and anonymous prepaid card transactions or transactions not processed by Visa. Cardholders must use care in protecting their card and notify TruStone Financial immediately of any unauthorized use. Contact us for more details.