Contactless payment allows you to make purchases without cashier interaction. Discover how contactless payment works and top payment apps.
Contactless payment allows your customers to make purchases without ever using their cards or even touching a terminal. While contactless existed for many years, it received a surge of use in 2020 at the height of the Covid pandemic. Even with businesses returning to normal, many continue to use contactless payment options. There are several variants of contactless payment available.
One option for contactless payment uses RFID technology, also known as chip cards. When the cards are held up near a reader, the information is automatically sent from the card to the receiver, scanning the card and approving the transaction. The process typically takes less than a second to complete. Recently, credit card companies have incentivized users to use contactless payment, offering additional reward points or other benefits. In addition to these perks, there are several other benefits to using a contactless payment system. Another option is near-field communications (NFC), which uses smartphone apps to process payments.
Benefits of Using Contactless Payments
There are several benefits for both customers and businesses relating to contactless payments. For both groups, one of the main benefits is convenience. Contactless payments are significantly quicker than other payment methods. This means customers spend less time in line, and employees have an easier time processing transactions. Because no cash is being used, neither customers or employees have to worry about counting out change.
Safety is another benefit with contactless payment. Both RFID and NFC payments have additional layers of protection against fraudulent purchases. Payments are also easier to monitor, allowing you to track all of your expenses. With the case of NFT payments, you also have an additional password on your account.
Setting up reward systems is also easier with contactless payments. When the payment system authorizes a transaction, it can also apply reward points to a customer account. This not only encourages customers to keep using contactless payments to speed up transactions, but it also builds customer loyalty.
Contactless payment also requires less equipment. For customers, they do not have to carry multiple forms of payment or cash. For businesses, contactless payment requires less equipment, leaving more space at the register for customers to place their items. It is also easier for businesses to train new employees on contactless payment systems.
Contactless Payment Cards
Contactless payment cards use a tap to pay method. In order to use this method, your credit card must be compatible with RFID readers. You can tell whether your card is compatible if there is an antenna symbol with four curved lines. The symbol is normally located on the back of the credit card towards the bottom, but some cards have it on the front instead. If you have a compatible card, you can tap it against the terminal to complete the transaction. Your data is then scanned and encrypted by the device, which transmits the information to your credit card company, approving the purchase.
Mobile Contactless Payment
Mobile contactless payment uses NFC to complete purchases. The process is almost identical to payment cards, except instead of using a credit card, you use an app on your smartphone. There are a few different variants of mobile contactless payment. The most direct is to use a wallet app that allows you to utilize tap payments.
A similar option is a wearable bracelet. The bracelet connects to a pre-paid credit card and when tapped against a scanner, connects to your account. These devices are still considered new as of writing. With the popularity of other smart devices, such as Apple Watches, market experts predict more wearable credit devices will become a trend. If your device is lost, you can still access all your information from a compatible app. The app also has a security option to lock your account if the physical device is lost or stolen.
The final option for mobile devices is scannable QR codes. With this method, the business supplies customers with the QR code for their purchase. Customers scan the code with their smartphone, which processes the payment information. Some apps use the opposite method, letting customers enter how much they want to spend into their app, which turns the payment into a QR code scanned by the cashier, acting like a digital check.
Apple Pay/Apple Cash
Apple Pay was one of the first contactless payment apps. It was first introduced as far back as iPhone 6 and is compatible with all future phones. Apple Pay works in conjunction with Apple Wallet, which stores all of your credit cards. When you access an NFC payment system, you can choose which payment method you use from your digital wallet. In recent years, Apple Pay has also become compatible with Apple Watches.
If you do not want to connect any of your credit cards to your phone, another option is to use Apple Cash. Apple Cash allows you to load funds from your bank into your cash account, acting like a debit card. Many parents use Apple Cash for their children who do not have a credit card. Not only does this keep them from sharing credit card numbers across multiple devices, but it gives them greater control over how much their children spend.
Samsung Pay is the Android version of Apple Pay. It has a few other benefits compared to similar programs, including an integrated rewards program whenever you use your digital wallet. Another different with Samsung Pay is it uses both NFC and Magnetic Secure Transmission (MST) payments. While MST is not nearly as popular as NFC, there are some locations that only accept MST contactless payment methods.
Cash App is a popular contactless payment option because it is compatible with both Android and Apple devices. Instead of linking credit cards to your account, you link your bank and make deposits into the app, giving you greater control over your finances. All transactions are also done anonymously. While Cash App was originally for transactions among other Cash App users, you can use the app with any NFT device that takes Visa cards.