Contactless payment is doing transactions without any type of physical contact between a card and a payment terminal. This is done by Radio Frequency Identification (RFID) technology. Besides cards, an RFID card function can also be embedded in other things like mobile phones, keys, watches, etc. There is a chip inside the RFID card that emits radio waves. An antenna is installed in the plastic to ensure the connection with the contactless reader. By using these, payment is made only by waving or tapping the RFID card. There is no need to insert a card inside a payment terminal.  Moreover, contactless payment using RFID is neither a pin-based nor an OTP-based payment system. Therefore in many countries, the number of transactions using RFID is kept limited to ascertain the security.
When a payment is made with a contactless payment RFID card, it is waved in a range of payment terminals or card readers. The card reader transmits radio waves into the card. Then, the card gets activated and receives an encryption key. After that, the card decrypts the encryption key and authorises further transactions. Then, the card reader sends the information about the initiation of payment to the card, and the card in return sends payment details. Meanwhile, it also generates a transaction document and approves it with a private key. Afterwards, the card sends it to the card reader, and the card reader sends a receipt to the card. In this way, the payment gets completed, and this whole process happens so fast that we don't even realise it.