What transaction type does a contactless card facilitate?

A contactless card facilitates low-value purchases without the need to enter a PIN. This method of payment is designed for convenience, allowing users to simply tap their card against a compatible payment terminal to complete a transaction quickly. The low-value threshold is typically set by banks or card network providers to minimize the risk associated with fraud for these transactions.

This option highlights the core functionality of contactless technology, which aims to expedite smaller transactions in settings such as retail or public transportation, where speed and efficiency are beneficial. The integration of contactless payments aligns with consumer demand for a faster checkout experience, contributing to its widespread adoption.

In contrast, other types of transactions, such as high-value purchases, typically require additional security measures like PIN verification to protect against fraud. This further solidifies why contactless cards are primarily used for low-value transactions. Transfers between different bank accounts do not relate to contactless cards, as those involve direct electronic transfers rather than point-of-sale transactions. Lastly, the idea of payments with a set limit regardless of the merchant does not accurately describe contactless transactions, as these limits can vary based on the retailer and the card issuer's policies.