Contactless payments are on the rise. As more businesses begin to take advantage of the benefits that contactless payments have to offer, the more consumers will adopt. Here’s what you need to know about Contactless Payments: How They Work, Why You Need Them, How To Adopt Them.
What is a contactless payment?
Contactless payments allow customers to make payments with the convenience of never having to hand over or swipe their cards. With contactless payments, customers simply tap their contactless device, which can be a credit card, mobile phone, smartwatch or fitness tracker against the contactless payment terminal and they’re ready to go.
How do contactless payments work?
In each device, there is an NFC chip and an antenna. This is what allows the customer to tap and pay. For a detailed breakdown, let’s check out MasterCard’s walkthrough.
Information about how mobile payments work was provided by MasterCard. Learn more here.
How are contactless payments secure?
Wondering if mobile payments are secure? You can find that out here.
Why does a business need to accept contactless payments?
Every business needs to accept contactless payments. But for convenience stores, gas stations, shopping malls, and restaurants, contactless payments are extremely important. Contactless payments not only benefit the consumer by making their lives more convenient, but they also benefit the merchant by saving time and money per transaction. Allow me to explain.
On the consumer’s end, contactless payments allow for a much more flawless consumer experience. First off, from the time the phone taps the terminal, the transaction should take no longer than 3 to 4 seconds. Allowing for consumers to purchase their items and move on with their day. A full contactless payment transaction averages around 12.5 seconds, compared to the 26.7 seconds for conventional card transactions and 33.7 seconds for cash transactions. This reduced transaction time can result in shorter queues, increased revenue and better customer satisfaction.
But looking beyond speed, contactless payments offer a much more personalized, hassle-free consumer experience. With the rise of mobile payments comes the rise of mobile coupons. These mobile coupons can be redeemed through a contactless payment terminal. Meaning that a consumer can simply walk up to the terminal, tap their mobile coupon, then their mobile credit card, and they will be good to go. No need to dig through a wallet full of coupons and credit cards. This continues to speed up transaction times as well as make the consumer’s experience easier and more pleasant.
In fact, it’s so pleasant, that 85 percent of contactless payment users said they would recommend the technology to friends and family.
For merchants, faster transactions mean more money and more turnover. This includes faster throughput at peak times. No need to print, sign, or handle paper receipts. And that employees can focus on selling rather than fumbling with cash. Contactless payments are also the ideal tools to enable cash displacement and do away with all the disadvantages that cash handling entails: cost, insecurity, inconvenience and slow business.
Businesses that accept contactless payments also see greater customer loyalty. According to MasterCard, contactless cardholders make purchases with 26 percent greater frequency than regular cardholders. Further, the overall usage for contactless account holders increases by 24 percent.
How do you adopt contactless payments?
Adopting contactless payments all comes down to what POS system you have. For the sake of this article, I will be discussing POS systems for small and medium size businesses. Large retailers simply contact their POS system provider to see what they offer. If you’re a small or medium size retailer, there are different options depending on your POS system.
1. Square Contactless and Chip Reader
This pocket size reader is for any business that has a POS system powered by Square. It accepts any contactless payment and also serves as a reader that can “dip” EMV cards(pictured below). This reader costs only $50 and makes a perfect addition to your Square POS system. Purchase the reader here.
https://www.youtube.com/watch?v=HZscD_iiK70
2. PayPal Here
This is an app based POS system that works with the PayPal Here App. This is also perfect for any small business or any business that’s on-the-go, such as a photographer. The PayPal Here reader is capable of reading EMV cards, contactless payments, and regular credit cards. It connects via Bluetooth to a tablet or phone and allows businesses to accept payments from anywhere. PayPal Here cost $150 but you can receive a $100 rebate if you process $3,000 worth of transactions in the first 3 months, bringing the price down to $50. Making it perfect for any small businesses. Get the PayPal reader here.
3. Ingenico Smart Terminals
Ingenico Smart Terminals are countertop POS terminals. These are terminals you will likely see inside medium to bigger retailers. Ingenico offers a countertop terminal that accepts EMV, contactless, as well as magstripe. This makes it a great all around terminal. Check out this page for all the technical specs to see if it’s right for your business.
Why wait?
All businesses will need to accept contactless payments as mobile payments continue to grow. Why not adopt now and gain customer loyalty because of it? Contactless payments allow for an enhanced customer experience as well as benefits to the business. Businesses can save time, money, and resources by eliminating as much cash as possible from their transactions. Accepting contactless payments is a necessary step in cutting cash from the business. So check out the many POS systems that allow for contactless payments and start accepting now.
For more information: Check out MasterCard’s Contactless Toolkit for Merchants
