Contactless is fast becoming one of the most popular payment methods amongst tech-savvy consumers. Consequently, many businesses are beginning to invest in till software and payment technology that enable swift but safe payments to be made by customers using a number of devices or cards. Are you a business considering offering contactless payments? If so, it’s beneficial to understand everything there is to know about this innovative technology, from how it works to the advantages it could bring to your business.
How Contactless Works
Prior to the emergence of contactless payments, consumers would need to either swipe or insert their card into a point-of-sale payment terminal in order to make a transaction. The drawbacks of these payment methods are as follows: in terms of security, the now less frequently used magnetic swipe cards pose a fairly high-security risk in that they are easy to clone. Likewise, although the more modern EMV chip cards are undoubtedly more secure, they are often slow and can take time to process payments. However, contactless, as a payment method, is both safe and fast.
Contactless cards and smartphone payment systems work using an embedded microcontroller chip with radio frequency identification (RFID). This enables the card or device to connect to a corresponding reader that is also equipped with the same technology e.g. a contactless card machine. Consequently, to make a payment, the customer simply places their card or smartphone close to the RFID reader, which will then receive the encrypted payment information. The outcome? A quick and painless transaction.
The Pros of Contactless Payments
There are two main advantages of using contactless as a payment method. Firstly, in comparison to the security of previous cards, contactless is much safer. This is due to the fact that not only is the payment information encrypted, but more explicitly because the card is always being held by the customer. Thus, the likelihood of it being lost or stolen is substantially decreased.
Secondly, the technology behind this payment method enables it to be incredibly fast. Studies have found contactless payments to be 63 percent quicker than making cash payments, and 53 percent faster than swiping or inserting credit or debit cards.
The Cons of Contactless Payments
One of the small but relevant risks posed by contactless payments is hacking. Like any payment method, it is possible for criminals to hack into the security systems of these cards to access data. However, this is incredibly difficult, even for the most equipped of criminals.
A second disadvantage that has recently come to light is that if a card is misplaced or pinched, offline transactions can still occur for a period of time afterwards, even if the card has been cancelled. But, although it is possible, if the customer has reported the lost or stolen card to their bank, these transactions are unlikely to succeed.
Is Contactless Right for your Business?
Whichever way you look at it, no payment method is entirely risk-free. Therefore, it is important to balance the small risks posed by contactless payments with the fact that it is fast becoming one of the most popular payment mechanisms globally. Now in the UK, one in 10 card transactions are contactless and this is only set to rise in the coming years. As a result, customers are beginning to expect a variety of payment options to be offered to them, with contactless now being one of them.
But how could offering contactless benefit your business? Well, if you are a business that moves with the times, contactless is certainly something you should consider. Not only will offering this payment method show that you are a modern and flexible business, but it will ultimately provide your customers with a more relaxed shopping experience that will be safer, faster and overall, more enjoyable.