Using the chip there's a decryption process to get the data off the chip. The terminals in use aren't exactly using high-end processors, so the decryption could take a bit longer. With the contactless payment it's just exchanging a small amount of data without the encrypt/decrypt taking up time.
The time it takes to contact the payment processor and get authorization. I've noticed a significant difference between a Wal-Mart and a Smith's (Kroger) in my town. Both of them don't take contactless payments so this is with the chip. The Wal-Mart takes ~10 seconds to return an authorization, but the Smith's takes about 3 seconds. Same card, even looks like the same PIN-pads on the self-checkouts. Could be faster network/Internet speeds at the store, could be differences in how they process the payments (I wouldn't be surprised if Walmart has some centralized setup to handle that rather than each store "calling" the credit card service)...hard to say, but there are a lot of variables beyond just chip vs NFC.
RusticGroundSloth t1_j6jmh5c wrote
Reply to comment by jimmysofat6864 in ELI5: Why are contactless payment methods faster than inserting the chip? by jimmysofat6864
I've got 2 semi-educated guesses on why this is.
Using the chip there's a decryption process to get the data off the chip. The terminals in use aren't exactly using high-end processors, so the decryption could take a bit longer. With the contactless payment it's just exchanging a small amount of data without the encrypt/decrypt taking up time.
The time it takes to contact the payment processor and get authorization. I've noticed a significant difference between a Wal-Mart and a Smith's (Kroger) in my town. Both of them don't take contactless payments so this is with the chip. The Wal-Mart takes ~10 seconds to return an authorization, but the Smith's takes about 3 seconds. Same card, even looks like the same PIN-pads on the self-checkouts. Could be faster network/Internet speeds at the store, could be differences in how they process the payments (I wouldn't be surprised if Walmart has some centralized setup to handle that rather than each store "calling" the credit card service)...hard to say, but there are a lot of variables beyond just chip vs NFC.