What are Contactless Payments?
As the name suggests, contactless payments don’t require any physical contact between the buyer’s credit card or smartphone and the point-of-sale (POS) system. You can pay for goods and services with just a simple contactless tap of a phone, card, or wearable device.
Should I Accept Contactless Payments at my Business?
Have you ever gone to the store and forgot your wallet or had a debit card fail? If you’re like most consumers, you probably have experienced this embarrassing situation. It happens! It’s common for credit cards to fail over time due to the wear of constantly using the magnetic stripe or chip. As a business owner, this can slow down your checkout process and can cause long customer lines. This may cause you to lose out on potential sales and leave your customers with a less-than-ideal customer experience.
Luckily, you can prevent this with contactless payments! This way you never miss out on a potential sale. With Gulf Management Systems, you can accept any type of contactless payment in the form of contactless cards, mobile apps, and digital wallets.
Say goodbye to customers frantically fumbling for loose change, hunting for a pen, and getting stuck at a slow card reader. These frustrations are fading fast in the age of contactless payments. The future of payments is changing fast. Beyond a simple tap, we’re on the verge of a payment revolution, and businesses need to stay ahead of the curve!
A Seamless Payment Experience
Whether through cards, mobile apps, or digital wallets, contactless payments use radiofrequency (RFID) or near field identification to communicate with the credit card readers.
To ensure payments are intentional, the card or device distance must be 2-4 inches from the terminal. As long as the retailer has a contactless-enabled card reader, your mobile phone or contactless enabled card will automatically complete the transaction.
It’s a frictionless experience that saves time for everyone involved. Although Near Field Communication (NFC) technology has been around for a while, the contactless payment experience still feels almost futuristic! As these payments are advancing, people must be ready to take full advantage!
Forms of Contactless Payments
More than half (51%) of Americans are now using some form of contactless payment. In an American Express survey, about 70% of businesses reported that their customers requested contactless payment options. Below are the 3 primary forms:
Contactless Cards
Contactless debit and credit cards are the most popular type of contactless payment. Referred to as ‘Tap to Pay” cards, these look the same as normal cards from the exterior but contain a small antenna inside that allows wireless communication with a reader. Users can securely store their credit card information on their smart phones and pay with a simple tap! One out of three in-person transactions in the U.S. use tap-to-pay.
Mobile Apps and Wallets
Mobile wallets are applications stored on mobile devices that take the place of a credit or debit card. The three most popular mobile wallets are Apple Pay, Google Pay, and Samsung Pay. When a user completes a transaction with the app, the service works as a secure intermediary, which allows the payment transaction to be completed.
Mobile apps and wallets make payment transactions easy and convenient.
No need to worry about forgetting your wallet at home! These technologies also provide some added comfort and security by adding another layer of separation between card information and the transactions.
Digital Payments
Also known as electronic payments, digital payment is a term that refers to any payment made through a device. These financial transactions do not involve the physical transfer of currency, which therefore provides added convenience for the customer and merchant. With online shopping becoming so popular worldwide, digital payments have become a necessity.
Whether customers are shopping online or making payments through a website or app, it is considered a contactless payment.
Why should you accept Contactless Payments at your Business? | Benefits
1. Contactless Payments are Fast Transactions
In a fast-paced world where everyone wants to save time, contactless payments are the perfect solution. Only taking a couple seconds to process, contactless payments are up to 10x faster than other payment methods.
2. Contactless Payments are Convenient
Contactless payments are hassle-free and enhance customer satisfaction. Say goodbye to manual processes and long checkout lines. This makes spur-of-the-moment shopping easy! With mobile wallets and apps, no need to worry about forgetting a credit card or cash! The only thing the customer needs is a mobile device and money in their bank account.
3. Contactless Payments are Secure
Contactless payment methods take security very seriously. With contactless cards, the antenna begins the payment only when in proximity to the POS system. With other forms, like mobile wallets, it usually requires a unique code before paying. Generally, digital wallets offer stronger security compared to other payment methods.
4. Contactless Payments help prevent the Spread of Germs
Using contactless payment options helps to eliminate the spread of germs or viruses. There is no need for individuals to physically touch the POS system, give a signature, or enter a pin.
Security Concerns and Considerations
There are always security concerns to be aware of with any type of payment. Although contactless payments and digital wallets offer a variety of benefits, security concerns should still be of consideration. Here’s a breakdown of potential threats and security measures that should be put in place.
- Lost or Stolen Devices: It is not uncommon for people to lose their phone. It can be very unsettling to lose a phone, especially one with a digital wallet. Fortunately, most digital wallets allow remote disabling of cards. Also, passwords and features like biometric authentication provide an extra layer of security.
- Data Breaches: Hackers will always try to gain access to sensitive information when it comes to any type of payment. Thankfully, strong encryption protocols and multi-factor authentication substantially reduce this risk. In addition, most digital wallets store limited card details on the device itself.
- Interception of Data: Since a contactless transaction only works about 2-4 inches from the terminal, the risk of someone intercepting data is low. However, even if someone were to intercept the data, the data transmitted is typically encrypted which makes it almost impossible to use.
- Malware or Phishing Attacks: Any online platform is susceptible to malware and phishing scams. Staying aware and practicing safe browsing habits are vital! When deciding which digital wallet app to download, make sure the app is from an official store and avoid clicking on any links that look suspicious.
How can Businesses prepare for Contactless Payments?
The future of payments has arrived. Now it is time for businesses to learn and adapt their strategies! Staying current with payment trends is beneficial for businesses of all sizes. You can provide a faster and streamlined payment process, enhance security measures, and attract new customers with contactless payments. The ability to embrace simple and secure payment systems will play a large role in determining if your business will thrive in the future. Jupiter research forecasts contactless payment transactions will surpass $10 million by 2027.
Here are some key considerations to ensure your business stays ahead of the curve:
- Focus on Security and Compliance
When it comes to payments, the one quality people value even more than convenience is strong security. Customers want to be certain that their transactions are going through safely, in a timely manner, and to the intended recipient.
To properly secure your business for contactless payments, confirm that all devices used for payment processing comply with the latest security standards. Maybe this means updating software with the latest security patches, upgrading your point-of-sale terminals, or ensuring that your payment processors are PCI-DSS compliant.
Additionally, it is important to educate your employees about the best practices when dealing with contactless payments. Train your employees how to use contactless payment devices properly and instruct them on how to spot and prevent fraud. Your employees should regularly monitor transactions and if there’s anything suspicious, report it immediately.
Lastly, you should have a response plan ready in case a security breach occurs. Outline the steps your business will take and include how to prevent further damage.
- Invest in NFC-Enabled Payments
NFC stands for “near-field communication.” This technology enables data transmission between two close devices. Similar to traditional credit cards with magnetic stripes, an NFC reader sends a signal picked up by an NFC antenna on an NFC-enabled device. This technology is what customers use when making a payment with their mobile wallet.
This method of payment technology has grown increasingly popular over the past few years, especially with new mobile wallet solutions.
As a business owner, it is vital for you to stay up to date on payment technology. By investing in a point-of-sale (POS) NFC-enabled system, you can accept customer payments using mobile wallets such as Apple Pay, Google Wallet, Samsung Pay, and more.
With an NFC-enabled system, your business will benefit greatly and avoid falling behind. You will keep up with the latest payment trends, boost customer loyalty, and improve overall business efficiency!
- Offer Multiple Payment Options
Although an NFC-enabled system should be of major consideration, your business should also accept other payment methods. There are still plenty of customers who prefer paying in other ways besides a mobile wallet.
Today’s consumers expect a variety of payment options. Offering methods beyond contactless, like credit cards and cash, caters to diverse preferences and results in happier customers.
To make it easier for your customers to pay conveniently, make sure to prominently display all payment options that your business offers. Whether contactless or traditional payment options, be sure to display this information in your store, on your website, and any other marketing material.
The Bottom Line on Contactless Payments
As economies have evolved, so have the numerous ways consumers pay for goods and services. Embracing contactless payments meets modern consumer expectations and positions your business at the forefront of the payment revolution! Tap-to-pay, mobile wallets, and electronic payments are evolving technologies that offer easier ways to transfer money. As financial management moves more into digital spaces, the technology will only grow in popularity and availability.
How do I accept Contactless Payments at my Business?
To enable contactless payments, you need a reliable and versatile payment processor. With Gulf Management Systems, we offer flexible payment options when it comes to accepting contactless payments such as Apple Pay or Google Pay! Set up a free payment consultation with one of our payment consultants!
