How does contactless payment work?

A contactless card contains a tiny chip and a coil antenna. When you hold it near a terminal, the terminal’s radio field powers the chip, which then exchanges data at 13.56 megahertz over a range of about 4 centimetres. Instead of sending your actual card number in plain form, the chip generates a unique cryptogram for each transaction, so intercepted data cannot simply be reused. Phone wallets such as Apple Pay and Google Pay go further with tokenisation, using a stand-in device number instead of the real card number. Many countries set a spending limit per tap without a PIN.