Basic Overview
Using a bank card to pay-as-you-go is very easy. Just touch your card on the yellow reader attached to the gates, or a stand alone validator if there are no gates, before starting your journey, and do the same at the end of the journey. If using a validator make sure that the yellow light changes to green and emits a single beep to be sure that your card has been read. On a gate this will also be acompanied by the gate opening. The readers will transmit your touches to the central system and your fares for the day will be calculated overnight, and a single charge made to your bank account the next day. The single charge will take account of any caps that you may have reached.
As long as your card has been touched in at the start of the journey and you are within the south-east PAYG area you are considered valid to travel. You can change your mind about where you are going without worrying whether your ticket is valid. The system will also charge the appropriate peak or off-peak fare depending on the time of touch in at the start of the journey.
The Technical Stuff
PAYG with contactless uses a special mode of contactless payments called Transit Mode. This was developed by TfL and the payment processors in the early 2010s and gets around issues that normal Retail Mode would cause. The major issue is the card asking the reader to get the customer to enter their PIN. In transit mode this will never happen. The card will either be accepted, or if it is faulty or on a blacklist it will be rejected. A brand new card will also be rejected until a transaction using the PIN is made. This can be a simple balance enquiry at a cash machine.
As soon as the touch has been accepted the details of the card are sent to the central system. The card number is tokenised so that security is maintained. The first touch of the day will trigger an authorisation so that the card is confirmed as valid. This may include a small charge (eg 10p) but this will be replaced with the daily charge at the end of the day. If the bank rejects the authorisation the system will prevent any further touches taking place, although one exit at gates will be allowed so you are not trapped within the system. Once authorised you can carry on using the card for all your journeys. A further authorisation may be carried out after you have reached a certain limit. If you don’t reach that limit then the authorisation may extend to the next day or two, so a regular user may not have an authorisation every day.