The COVID-19 pandemic has disrupted so many industries, and the payments sector is one of them. Consumers are shying away from using cash or interacting with Point-of-Sale (POS) machines for fear of catching or spreading the virus. These health and safety fears have led to an increase in the number of consumers who use contactless payments such as ‘tap and go’ and mobile wallets. With MasterCard reporting a 40% increase in contactless payments plus predictions that this trend will continue in the future, here’s all you need to know about adopting contactless payments for your business.
What are contactless payments?
As the name suggests, these are payments that are made without the consumer’s card or mobile phone coming into contact with the POS system.
Contactless payments are powered by Near Field Communication (NFC) technology which makes it possible for the card/ smartphone and the POS system to communicate when they are within range. When a customer brings their phone or card near the POS, it either beeps, a green light comes on or a checkmark appears to show that the payment has been completed successfully.
When using this payment method, consumers don’t need to sign their names or input a Personal identification number (PIN).
Examples of contactless payments
There are several types of contactless payments that a consumer can use to pay for goods and services. They include:
Tap and Go
This method allows consumers to pay by tapping or waving their cards over the POS system. Only consumers who have NFC enabled credit and debit cards can use this method.
Contactless cards have the contactless symbol which looks like the Wi-Fi symbol rotated by 90 degrees. Additionally, your business should have a contactless-enabled POS system for you to accept contactless payments.
Mobile Wallets
When consumers store their money in mobile wallets, they can access it through applications or wearable devices such as smartwatches. When paying using mobile wallets, consumers can either tap their phones or scan a QR code. This can also be used for online payments. Common mobile wallets include:
Apple Pay: Payments are made by holding an iPhone or smartwatch over the POS system with a finger on the Touch ID button.
Android Pay: This is Google’s mobile wallet and payments are made by opening the Android Pay app and holding an NFC enabled Android device over the POS.
Mobile Banking Apps: Consumers can make payments through instant money transfers or scanning QR codes.
How contactless payment can help your business
The benefits of contactless payments to consumers are wide-ranging, but there are also business benefits. These include:
Increased payment security and a reduced risk of fraud
Contactless payment methods are as safe as EMV chip and PIN (Personal Identification Numbers) transactions. Also, your customer’s credit card information can’t be used fraudulently in case of a data breach.
If your business operates in a high-risk industry, this protects your business from hefty fraud-related fines by card networks while also making your customers feel secure.
More speed and convenience for your customers
Contactless payments are fast and convenient. Your customers don’t have to spend time inputting PINs or signing receipts, which means shorter checkout lines and faster customer service.
Having a contactless payment option for customers can put your business miles ahead of the competition. This is especially true in industries such as CBD stores, lending companies or those considered a high risk, where contactless payment is rare.
Increased hygiene
The grizzly truth is that the paper surface of bank notes is full of disease-causing bacteria and since the outbreak of COVID-19, more customers are conscious of the ability for cash to spread viruses and diseases.
Customers will prefer your business if you offer contactless payments because they can protect themselves from catching or spreading the virus. With customers reporting that they will continue using contactless payments post-COVID, adopting it will improve your business long-term.
Your business can start receiving contactless payments
FLEX Payment Solutions offers electronic invoicing that can help your business start taking payments without your customer being physically present (ACH, RCC, and card payment if stored). We can also help your business to start taking contactless payments such as ‘tap and go’ and Apple Pay.
For most businesses, accepting contactless payments is as easy as getting a contactless POS system. Unfortunately, things are not that simple for Native American businesses (tribal lending companies) and CBD businesses; most of whom are unable to even accept credit or debit card payments. This is because there are labeled as high-risk merchants by most payment solutions providers.
We understand the unique compliance challenges that Native American and CBD businesses face when trying to get a payment solutions provider. In response, we have created custom payment solutions that can help your business comply with the legal requirements that will allow you to start taking credit and debit card payments which is the first step to accepting contactless payments and growing your business.
