The pandemic changed a lot of things about the way your customers shop, including an increased interest in contactless or "touch-free" payments. Businesses are looking for ways to accept payments without their employees handling cash, and customers want to avoid handing over their credit cards or touching a payment terminal.
As contactless payments grow in popularity, it’s important to understand them in action. For instance, contactless payments can help keep customers and employees stay safe, while improving checkout speed and security. When shoppers know they have touch-free payment options, they may be more likely to shop at your store, too.
In this guide, learn about contactless payment technology — including different types like scanning a QR code using a payment app or tapping a credit card over the checkout terminal —plus the potential benefits of offering touch-free payments.
Contactless payments refer to payments made without physically touching a payment terminal or device. Instead of using traditional methods like inserting a card into a chip reader or swiping a card, contactless payments use near-field communication (NFC) technology to facilitate transactions between two devices (e.g., a phone and a point-of-sale terminal) in proximity.
Contactless payment systems can be grouped into two categories, depending on the equipment required by you and your customers.
On one side, there are contactless credit and debit cards or digital wallets that can securely transmit payment data. Utilizing NFC technology, transactions occur when users tap their device near a payment terminal.
Whether a credit card can be used for touch-free payments depends on the actual card itself. Credit card companies have worked to transition from swipe-only technology to secure EMV chips, but some chip cards don't have the embedded antenna needed for touch-free payments. You can tell if a customer's card can make touch-free payments by looking to see if it has a wireless wave-like symbol on it.
Contactless payments can also be facilitated via QR codes that can be linked to your business, so customers can scan, pay, and go without making contact. So if a customer’s card cannot be used for contactless payments, they can still pay touch-free using their smartphone to scan your payment QR code.
There are many options when it comes to contactless payment methods. Here are some of the most popular ones merchants can offer:
There are many benefits of contactless payments, from added convenience to increased payment security to faster checkout.
Tap-to-pay and digital wallet transactions don’t include a customer's account details, like their name, account number, card expiration date, CVV, or PIN, which is why some consider them more secure than traditional credit card payments. What’s more, contactless payments use a wireless, secure connection between a shopper's touch-free payment method and the payment terminal. In the process, a one-time code (also known as a token) shares the encrypted payment information with the terminal—and that token changes each time a customer makes a purchase with their digital wallet.
Contactless payments also require the customer to physically initiate the transaction, making it difficult to send a contactless payment accidentally. In the same way, QR code payments provide added security given they require the user to unlock their phone and/or enter a code to complete a transaction.
Contactless terminal payments usually require only a single action, like tapping the card or pushing an app button on a smart device. Making a QR code payment takes just two steps: scanning the code and entering the amount to pay. Customers can be on their way faster when they're not swiping a card and signing a receipt or handing over cash and waiting for change.
No card? No problem. Whether a shopper forgets their wallet at home or decides to make a purchase in a pinch, using contactless payment methods can help facilitate quick and seamless transactions no matter the circumstances.
Gen Z consumers continue to embrace digital payment adoption, like mobile wallets, contactless payments, and peer-to-peer payment apps.1 So accepting touch-free payments is key to reaching digital-native consumers.
One of the first steps to accepting contactless payments is acquiring an NFC-enabled payment terminal to accept touch-free payments from a card or phone. If your current hardware doesn't support contactless payments, you can consider upgrading or replacing it. And when it comes to mobile payment options, consult your payment processor for guidance on integrating them seamlessly.
Once your business is set up, accepting contactless payments may go like this:
Keep in mind that you don't need any special hardware to accept QR code payments. Once you've created a QR code, just display the code where shoppers check out. Your customer scans the QR code using their payment app, enters the amount to send, and then pays.
Tap card payment systems are critical for in-store shopping, allowing customers to pay at their favorite places like retail shops, restaurants, grocery stores, pharmacies, vending machines, and more.
Tips to make the touch-free payment process easy for your customers and staff:
Ready to offer contactless payments? Now it’s time to get your customers on board. Here are some tips to get started:
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