What characterizes a contactless card?

A contactless card is characterized by its ability to facilitate transactions without the need for physical contact with a payment terminal. This is made possible through Near Field Communication (NFC) technology, which allows the card to communicate with a payment terminal when held near it. This feature provides a quick and convenient way for consumers to make purchases, as they can simply tap their card on the terminal instead of swiping or inserting it.

This characteristic enhances the speed and efficiency of transactions, especially in environments where quick payments are beneficial, such as retail checkout lines and public transportation. The technology also typically allows for transactions up to a certain limit without requiring additional authentication, which further streamlines the payment process.

In contrast, options mentioning cash withdrawals from an ATM, requiring a physical signature, or accumulating interest do not directly relate to the fundamental operation of a contactless card, thereby highlighting the specific and distinguishing feature of this intended answer.