Why Choose Contactless Payments?
As contactless payments rapidly replace traditional card payments, they are becoming the new standard for convenience and security. In leading markets like the U.K., Australia, and Singapore, adoption rates are over 90%, and nearly 90% of U.S. consumers now use contactless payments. With the market projected to grow at a 19.1% annual rate until 2030, now is the time to embrace this shift.
By offering contactless payment options, you can meet consumer demand for fast, seamless transactions and position your business at the forefront of a growing trend. Stay ahead of the curve—enhance customer experience with contactless technology today.
The Rise of Contactless Payments
Contactless payment methods use technologies like RFID, NFC, or QR codes to process transactions. Users can make payments by simply tapping or waving a card, smartphone, or wearable device over a contactless-enabled terminal, eliminating the need for physical contact. This method is fast, convenient, and hygienic.
Available in various forms—such as cards, mobile wallets, apps, and wearables—contactless payments have gained popularity for their ease of use. Consumers appreciate the flexibility, especially when they can pay using a wearable device, even if they’ve forgotten their wallet or phone.pple Card.
How Contactless Payments Work?
Typically, the contactless payment systems work by utilizing radio-frequency identification (RFID), a widespread technology built upon electromagnetic fields. RFID employs memory chips that store data or “tags,” plus RFID readers that decode the message. Using this technology, physical objects in close proximity can talk to one another. These systems are used for everyday tasks like package-tracking, inventory management and toll collection.
Contactless payment systems often rely on near-field communication (NFC). This is a newer and more complex technology that falls under the RFID umbrella. Unlike RFID, which functions at many feet, NFC only works when there is a small distance between objects—usually a few centimeters. So, there is no danger that you will accidentally pay for a stranger’s groceries if you pass them in the checkout line.
NFC is the underpinning technology for services like Apple Pay and Google Pay. Cardholders enrolled in these services can use contactless payment platforms on their smartphones, watches, or other wearable devices for fast and easy transactions at point-of-sale (POS) terminals. All Biz Systems offers an NFC reader for businesses looking to jump on the mobile and contactless bandwagon.
NFC technology enables a variety of everyday activities beyond payments, too. It is used for e-ticketing, for instance. Users can tap a transit card or smart device to enter a subway turnstile or hop on a bus. New York City’s Metropolitan Transportation Authority (MTA) is currently rolling out OMNY, a contactless way to pay for public transit around town. If all goes to plan, the system will replace the MetroCard by 2023.
In the context of banking, cardless ATMs allow customers to withdraw money with a simple swipe, scan or tap. Instead of physically inserting a debit card into the machine, these ATMs let customers withdraw cash via smartphone app.
Some banks have proprietary apps for accessing cardless ATMs, while others work with third-party mobile wallets like Apple Pay. These apps generate verification codes (a QR code, for instance) or display a digital version of the user’s debit card. Users scan the code or tap the device near an indicated spot in the ATM booth, and voila—transaction complete.
Some ATMs also have NFC-enabled capabilities that let users tap their debit cards in an indicated area on the machine instead of manually typing in a personal identification number (PIN) on a keypad.
Both NFC-enabled and EMV debit cards contain chips, so a “chip card” can refer to either. Only NFC-enabled cards, however, will function for no-touch payments and cardless ATM transactions. Cardholders can easily tell if their card has NFC capabilities by checking for the contactless indicator, which looks like a Wi-Fi symbol turned sideways.
Benefits and Considerations for Contactless Payments:
Paying for Stuff in a Post-COVID World
In early March, the World Health Organization warned that banknotes may be capable of carrying and spreading the novel coronavirus. Although the jury is still out on just how likely it is to catch COVID-19 by touching surfaces or objects, brick-and-mortar businesses and bank branches are likely to want to minimize the risk of infecting customers, however minuscule it may be.
On its banking blog, Accenture listed “a strong push toward a cashless society” as the No. 1 potential long-term impact that the pandemic may have on global payments processes. MasterCard polled 17,000 consumers in 19 countries and found that they perceive contactless payments as “the cleaner way to pay.”
If these predictions and sentiments manifest, bank customers can expect a quite different transaction experience going forward. For one thing, they may spend less time waiting in lines, as contactless payments lend themselves to speedier transactions. While the transaction time for a chip-enabled card can be as much as 30 to 45 seconds, a contactless transaction can reduce that to as little as 10 to 15 seconds.
From tap-to-pay debit transactions to no-touch ways to pay for public transit, the current landscape is fertile ground for contactless technology to take off.