Social distancing and minimizing human contact are topics that are on everyone’s mind these days, and for good reason. Consumers and businesses alike are leveraging strategies to limit any possible exposure to outside germs – and one of those strategies is contactless payments.
Contactless payments – or processing transactions via the tap of a credit/debit card, smartphone, or smart watch – are undoubtedly an effective way to keep business flowing while keeping your employees and your customers safe. But an added bonus is that contactless payments are growing in popularity around the world and are sure to serve you well into the future. Read on to learn more about contactless payments, how to get started accepting these modern transactions, and additional tips on how to keep safe during this challenging time.
What are Contactless Payments?
Contactless payments can take many forms. According to Investopedia,
“Contactless payment is a secure method for consumers to purchase products or services using a debit, credit, or smartcard—also known as a chip card—by using RFID technology or near-field communication (NFC).
To make a contactless payment, tap your card near a point-of-sale terminal that is equipped with the contactless payment technology. Since contactless payments do not require a signature or a personal identification number (PIN), transaction sizes on cards are limited. The allowable amount for a contactless transaction varies by country and by the bank.
Contactless payment is also referred to as tap-and-go by some banks and retailers. Examples of non-credit or debit card contactless payments include transit cards, Apple Pay, Android Pay, and Google Wallet.”
While these payments may seem like a recent trend, the technology has been in existence since the 1990s – however, at that time, only a small number of merchants used this payment method.
Benefits of Contactless Payments
- Hygienic: Contactless payments are a cleaner alternative to paying with cash or using a pin pad on a credit/debit card terminal. Simply put, there’s less opportunity for contamination.
- Fast: A major benefit of contactless payments is how speedy they are because no PIN is required, and your employees don’t need to manage cash transactions. By speeding up transactions, you can successfully line-bust and keep your customers happy.
- Improved customer experience: Like we just mentioned, contactless payments create a streamlined, easy, and quick experience – something consumers are sure to love.
- Secure: While some people are under the impression that contactless payments are not as secure as a chip card transaction, contactless payments provide the same EMV security provided by chip cards.
How Popular are Contactless Payments?
According to a 2018 report, in the US 26% of all consumer transactions (that’s 50 billion purchases!) are made with cash, but contactless payments are building in popularity around the world and the US is bound to follow the global trend. For example, contactless payments account for approximately 20% of all transactions in Australia, Canada, South Korea, and the United Kingdom.
It seems the US is already on that path – TD Bank has seen a surge in contactless transactions following the coronavirus outbreak, and it’s likely that consumers will continue paying for their purchases in this quick and easy way well after the pandemic has ended.
How to Implement Contactless Payments
Are you ready to get started with contactless payments, if you haven’t already? Here’s what you need to know.
Most banks offer contactless credit and debit cards, as well as the terminals that are required for, and equipped for, processing contactless transactions. These terminals have a contactless payment symbol to show customers that contactless payment methods are accepted, but you may also communicate to your customers that you accept these payments in person, through social media or email, by placing a sign at the point of sale, or via receipt marketing.
Some retailers set a low limit for contactless systems to prevent fraud, but some do still allow large transactions, with a required signature.
When it’s time to pay, customers hold their card, smartphone, or smart watch 1” to 2” from the contactless symbol on the terminal. When the payment has been accepted, the terminal will alert the customer with a beep, green light, or checkmark.
