New Relevance for Contactless Payments
Contactless payments have evolved over the years. As businesses begin to reopen following shelter-in-place mandates for the COVID-19 pandemic, consumers are increasingly leveraging this technology for everyday transactions. Shoppers are leaving their wallets at home and paying exclusively on their phone. You may be wondering what the current state of contactless payments is, and whether your business should take contactless payments. There are a few factors you’ll want to consider before moving forward with this option.
Let’s dive in.
What are contactless payments?
Contactless payments integrate NFC (near field communication) technology into chip-enabled credit and debit cards. This enables shoppers to pay with their smartphone without any contact between the point of sale (POS) and their smartphone, bank card, or key fob. In a time when shoppers are more cognizant of health risks than ever, this can be an appealing option offer for your transactions. As the name suggests, this payment style literally reduces the physical contact required in a sales transaction for your customers and team members.
How do they work?
NFC is a radio-frequency that uses a wireless radio antenna to communicate the card with the POS. The card is powered wirelessly by proximity to the POS (up to 4 cm), to ensure accurate and quick payments.
Is this trend here to stay?
Contactless payments are expected to grow 300% over the next five years, according to a new Juniper Research study. With consumer industry titans like Apple, Android, and Samsung leading the charge in mobile wallets, industry experts expect to see a quick adoption of Mobile Wallets and NFC technology. In fact, Apple Pay alone is on pace to account for 10% of all global card transactions and currently accounts for 5% of global card transactions. That number is projected to double by 2025.
Who is using contactless payments?
Even before the outbreak of COVID-19, many consumers were looking for more flexibility and mobility in payments. Accelerated by the outbreak, payment firms are pushing contactless payments as governments and consumers try to minimize the interactions between people and common surfaces to combat the spread of the virus.
While a couple of years ago geography and generation were major factors in contactless adoption, the virus has acted as an equalizer. Today people of all ages and geographic regions are seeking low-risk, low-contact options for payment transactions.
How do customers benefit from contactless payments?
Virus or no virus, the convenience of contactless payments is a driving benefit for customers. Smartphones allow customers to stay connected. They can access the Internet, get from place to place, and enjoy many other benefits. So why shouldn’t they then be used as a way to pay? Paying with a phone eliminates purse rummaging and the need to remember your wallet for every outing. Customers can pay on the one thing they never leave the house without: their smartphone.
Additionally, the increased security is both a benefit to the customer and the merchant. The enhanced security from chip technology has shown a drastic reduction in credit card fraud. Because contactless payments are PCI compliant and have the EMV chip integrated, customers have peace of mind that their payment information is safe and secure. And, by accepting EMV enabled payments, businesses can avoid chargebacks and maintain a good reputation with their customers.
How does business benefit from contactless payments?
By adopting the latest in payment technology you are future-proofing your business. At the same time, you are meeting the demands of today’s digital-savvy customer. Contactless payments are quicker than traditional forms of payments. This helps you keep lines shorter, process more transactions, and ensure happy customers.
Another benefit to businesses is that contactless payments decrease the ‘pain of paying’ for customers. Given the ease and convenience of using mobile wallets, a study by Mastercard showed consumers may spend up to 30 percent more with contactless payment methods than with traditional credit cards.
Ultimately, the decision is yours.
So, should your business accept contactless payments? If you want to drive traffic, see happier customers, and never lose out on a sale – be the payment flexible business. Design your store to accept multiple types of transactions, including contactless payments. Get your business set up today to accept this growing form of payment.
With Revel’s payments features, you can provide your customers flexible payment options. Learn more about what an integrated POS and payment processor can do for your business.