Contactless payment is a truly innovative way of transactions with customers. Buyers can now finish the purchase by simply waving or tapping their electronic device or contactless card near a POS terminal. Contactless payment technology will certainly occupy an essential position in the future of the e-commerce industry.
What you need to know about contactless payment technology
What is contactless payment?
A contactless transaction is regarded securely. Consumers can use radio frequency identification (RFID) technology and near-field communication (NFC) to purchase products or services using debit, credit, smartcard, or other payment devices. This payment method involves tapping a payment card or other devices against a contactless payment terminal. Some banks and businesses refer to contactless payments as tap-and-go or tap.
POS terminals with a distinctive sign denoting contactless payment, which is similar to the wifi logo but flipped on its side, are used by merchants who accept contactless payment.
When the customer’s card is near the contactless payment icon on the terminal, the merchant’s system encourages them to pay. The information is sent to the bank electronically, utilizing data from the chip on the card. The consumer is notified by a buzzer, green light, or checkmark when the system acknowledges the tap. The transaction is finalized once the approval is received.
Example of Contactless payment
In addition to banks and other financial institutions, other companies have also leaped on board and are offering their own contactless payment technology options. For example, in 2011, Google and Android released NFC-based payment systems compatible with their devices, while Apple followed suit in 2014 with Apple Pay, its own version of the digital wallet.
Google Pay allows customers to make safe payments at partners’ brick-and-mortar and online shops using their smartphones. Instead of utilizing a credit card number, Google sends the store an encrypted number associated with the user’s payment card. Customers can transfer money using an email address or phone number.
The Apple Wallet app is already installed on the majority of Apple devices. It allows customers to save credit and debit card information on their device—typically an iPhone or an iWatch—and use it to make in-store purchases. Purchases can also be made through the system’s website and other apps. Apple Pay users can also use their text messaging system to send money to friends and relatives.
Samsung also introduced a digital wallet, which allows users to save credit card information on the app and spend it at merchant terminals. By utilizing their phones to make transactions, Samsung Pay users can receive cashback and other perks. To check out, users upload a picture of their card or a barcode and tap.
Why is contactless payment technology important in the future?
Successful companies understand the importance of prioritizing the client experience above everything else. Contactless payments can assist you in doing so. Customer satisfaction tends to rise as waiting times reduce. This makes them excellent for restaurants and brick-and-mortar retailers, where customers tend to wait longer.
Furthermore, firms that accept contactless payments show that they value remaining up-to-date on payment technologies. Customers that have adopted contactless payment methods have been shown to utilize them often, according to studies. They also show greater loyalty toward businesses that accept them.
With ConnectPOS, it’s not a hard question for retailers if they want to enhance an easy-to-use shopping experience for their customers. The PWA Consumer App not only provides easy access by QR code but also offers barcode scanning for product information. This saves time for both customers and shopkeepers.
Limiting physical touch and attempting to avoid the transmission of germs is critical in the present climate of social distancing caused by the COVID-19 epidemic. Contactless payment technology will reduce bacterial spread.
You don’t have to handle a customer’s card or receive the cash they’ve touched when you use contactless payment. The same advantage applies to your consumer, lowering the risk of germs spreading during transactions.
The card or gadget used for contactless payments never leaves the customer’s grasp. Furthermore, the chip technology used in contactless payments is more secure than traditional payment methods.
Contactless card fraud losses are also consistently low. In reality, as in-person fraud becomes more difficult, 85% of credit card theft increasingly occurs online. Contactless payments are, above all, PCI compliant. As a result, businesses can be confident that they will prevent chargebacks and keep a favorable consumer reputation.
Cards aren’t the only way to make contactless payments. Contactless readers with NFC technology can interact with phones and related accessories like watches and rings. When Apple Pay first launched in 2014, it allowed customers to pay with their phone if they had forgotten their card or if it was out of reach. When the Apple Watch was released, this was further refined. You may also make a payment without having to take your card from your wallet, making the payment procedure much simpler for the consumer.
Moreover, contactless payment technology makes operations more efficient. A streamlined payment system reduces the number of steps required to complete a transaction. Furthermore, you may save even more time by allowing your customers to get their receipts by email. Faster transaction speeds help you to run your business more efficiently while focusing on other critical issues.
Improved loyalty programs
Customers want to be a part of loyalty programs that provide value and convenience. Contactless payments can be used as a marketing and loyalty tool.
Customers that make contactless payments are rewarded with digital loyalty programs Starbucks, for example, offers a loyalty program that rewards consumers who make in-app purchases.
Better brand positioning and more revenue
Companies may differentiate themselves from their competitors by giving contactless solutions to their consumers. This not only improves the customer experience but also allows them to provide added-value services. With the introduction of more premium contactless smartcards, such as metal cards, they may now target more rich customers.
In a nutshell
Contactless payment technology gives faster transactions than both cash and card, which is definitely a key point that every merchant needs to pay attention to. So for long-term development, call us now to get the most useful solutions for your own business.