Will the coronavirus pandemic have an impact on our payment habits? The World Health Organisation revealed that the risks of being contaminated by the exchange of coins and banknotes are minimal, but not null. Contactless payments by cards and by mobile devices have become the last barrier against coronavirus and are now experiencing significant growth.

The contactless payment is based on NFC (Near Field Communication), a short-range wireless communication technology that combines an integrated chip and an antenna and enables exchange information between devices when they are brought within a few centimetres (up to 5 cm) of each other. A simple tap of your card, smartphone or connected watch to the store payment terminal is enough to pay your purchases instantly. The technology is secure and convenient: no bank code to enter, no change to give back and no need to touch the terminal payment or buttons to compose your bank code. 

By bank cards or by mobile devices

There are two types of contactless payment solutions: contactless cards and mobile device payments (smartphones or connected watches). In Luxembourg, all the major banks offer NFC-enabled cards (credit cards and V PAY debit cards). If you do not want to use this feature, indicated by the contactless symbol on your card, you can ask your banker to deactivate it. The contactless card is mainly used for small purchases. Until recently, the maximum amount for this type of transaction was set at EUR 25. Since 1 April 2020, the limit is increased to EUR 50 to encourage people to use contactless payments as much as possible. However, consecutive cumulative purchases may not exceed EUR 100. Beyond these two limits, you must encode your PIN code.

Mobile payment allows you to pay larger amounts with a limit similar to that of your credit or debit card and offers additional features. Several mobile solutions are available on the market. The most commonly used are Apple Pay, Google Pay, Samsung Pay and Digicash. The first three work on the same principle: the credit card is dematerialized and stored in the electronic wallet of the mobile device or phone. The services offered are the same: they allow you to make purchases in the same way as contactless bank cards and to pay instantly on mobile applications and sites provided they are partners. The only notable difference lies in their compatibility. Each solution only works with products from the same brand (Apple, Samsung) or with the same operating system (android for Google), provided, of course, that they have NFC technology. Moreover, not all banks offer these mobile payment solutions. It is best to check with your financial institution to find out which of these three mobile payment solutions it is compatible with.

Scan, confirm, pay!

Digicash is a mobile payment solution issued by five of the largest retail banks of the country[1]. It allows you to pay directly from your current account. Digicash is very easy to use: after downloading the Digicash application from your financial institution and linking it to your bank account, you can pay contactless in shops and restaurants, cover your bills without entering the references, the amount and the beneficiary and make purchases on the Internet and applications without entering credit card details. You just have to place your smartphone near the Digicash terminal, scan the QR code on the bill or choose Digicash as a payment method and validate the payment with your fingerprint or PIN code. You can even send money to your contacts using only their mobile phone number. 

For now, this mobile banking payment service is only valid in the Grand Duchy and with a certain number of partners, including 73% of municipal administrations and the Grand-Ducal Police! But the service is gradually gaining popularity: partnerships with business owners, freelancers and non-profit organizations are increasing year after year and it will be soon possible to make cross-border payments.

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