5 Big Contactless Payments Questions Answered

Contactless payments are becoming the preferred method of payment for customers in the US, right from the grocery aisle to the commute. 

Contactless shopping is now used by more than 50% of American shoppers PaymentsA recent study found that a majority of respondents agree. Mastercard survey

  1. What are contactless payments and how do they work?
  2. How can contactless payments be used?
  3. Why accept them?
  4. What are the steps to get you started?
  5. What are the best ways to choose the correct processor? 

What are the top credit card processors?

It can be costly to waste time with the wrong processor. This and other mistakes can be avoided with this easy-to-follow guide.

1. What are contactless payments and how do they work? 

Contactless payments are wireless financial transactions, where your customer approves their  purchase by hovering their device near your point of sale (POS) reader of the vendor. Customers don’t need to touch the retail POS systemYou can also insert a card in your reader.  


2. How can contactless payments be used?

You’re probably already familiar with some of these contactless payment methods:

  • Apple Pay Apple’s payment service helps shoppers make purchases using their iPhone, iPad, Apple Watch or Mac via Safari.
  • You can pay with your credit card: Google’s payment service allows people to make purchases using their Android phones, as well as Google’s Chrome web browser.
  • Samsung Pay: Samsung Pay users can use their supported phones to swipe and tap on the payment terminal. Samsung Pay also supports magnetic strip terminals, which makes it compatible with almost every credit card reader.

Contactless payments allow data to be passed from one device over radio waves to another, as long as both devices are sufficiently close to each other. 


3. Why is it important for my shop to accept contactless payment?

That’s one of the payment processing questionsWe get asked many times. They are becoming more and more popular.  Mercator Advisory Group’s 2020 Annual U.S. Debit Card Market Data Review showed: 

  • 33% US consumer have converted their top-of–wallet cards to contactless.
  • 45% US customers prefer stores that have a contactless POS
  • US Consumers will keep using contactless phones after the COVID.

Retailers should accept contactless payments for many reasons. 

They come quickly

Patrick Brown, the founder of contactless payment, explained that it takes seconds for contacts to be processed and is as easy as tapping a tap. Shopping for yourselfThe UK’s largest gift shop. “In high-volume stores this means fewer employees are required at the [checkout counter]. Customers expect speedy service and don’t want to wait in line to pay,” he said. These needs can be met by contactless payments. 

These are considered private.

Contactless payments are not able to share payment or billing information with retail employees at the POS. Retail staff never ‘see’ the card. Each purchase gets a unique transaction number. Instead, communication with retailers is encrypted.

These are safe

Andrew Dale explains that fraudsters also have trouble with contactless payments.

At the Technical Director CloudTech24. “Near-field communication (NFC) technology protects payments from fraudsters who are standing at a distance attempting to steal data because of its close proximity. NFC contactless payments can only be made when the payment devices are within a few millimeters of each other,” he said. 

They’re hygienic

They’re a better fit for the post-COVID era too. Germs can be passed between people if a retailer doesn’t clean their card terminals after each use. And that’s not ideal in a time of heightened customer concerns about hygiene. 

“Customers never have to touch the machine or the PIN pad when making contactless purchases,” said Andreas Velling, CMO of FractoryAn online company for metal fabrication. “Instead, they only make touch with their card or phone, isolating any germs and reducing the risk of spreading to the next consumer.”

These may increase order values

Contactless payments may be safer and quicker than cash, but they could also have a nice side effect. Researchers have found that they may increase order value and several years of research have proven this. They can drive impulse purchases because of their speed and convenience. 

Tourists and shoppers want to be in touch with each other. 

Customers value contactless payment above all else. “Retailers who accept contactless payments provide a faster and smoother checkout experience, earning the loyalty of their customers,” according to Tyler Martin, a certified business coach and the founder of ThinkTyler. Tourists from Australia, Ireland, the UK and other countries see tap-to pay as the standard. 

4. Contactless payments: How do retailers start? 

NFC-enabled terminals are essential for retailers looking to increase their reach with contactless payment. If you have made the switch to EMV-ready devices a while back, you may already have all you need. NFC is also available on many EMV-ready devices.

Countertop POS terminals

Be sure to check that the hardware required to process contactless payments is installed before you buy a POS terminal.

“Any terminal that accepts contactless cards can also accept alternative contactless payments like mobile wallets, watches, and other wearables,” said Michael Hess, eCommerce Strategy Lead at CodeSigningStoreThis company offers code signing certificates to business websites.  

“Take the procedures to enable contactless EMV chip capabilities if you’re considering a migration to EMV chip technology. Accepting contactless payments shows that you’re up to speed on payment technologies as a retailer. 

Mobil POS terminals

There are additional considerations due to the speed and ease of contactless payment. They are mobile, in every sense. Your POS is now mobile and can be used anywhere customers are. 

The handheld POS terminals may be a better choice. “With today’s social distancing concerns in mind, mPOS makes it easy to bring the checkout to your customers through contactless, QR codes and other methods,” said Adam Wood, co-founder of RevenueGeeks

Tip:NFC technology can be supported by almost any system with NFC support any contactless payment method — such as Apple Pay, Android Pay or Samsung Pay. 


5. What should I do to assess contactless payment processors

There are many choices, as with almost all things these days. To help you limit your options when it comes time to Choose a payment processorThis will help you to implement tap-to pay. These criteria should be reviewed by potential vendors.

  • Customer support: Technology breaks and the fix isn’t always simple. Look for a payment hardware and software company that offers excellent support to assist you in learning their system and resolving any problems.  
  • Integrations of software and apps: You should also consider other factors than your ability to take payments. If you’re considering a commerce platform with integrated processing, make sure it can connect with your other day-to-day tools, whether that’s your accounting software or payroll program. Relevant integrations will save you time managing the business’s finances, taxes and HR.
  • Omnichannel capabilities: If you’re going with a commerce platform, it should support an omnichannel strategy, connecting your online store to your retail shop. The commerce platform helps you organize your stock, and syncs products, orders, and other data between sales channels. To execute this strategy, you’ll want a payment processor that can support both in-store and online transactions like a payment gateway. 
  • Analyzing and reporting DThe key to identifying business trends and seasonal products is ata. You can gain insights into your retail business and track your successes, see revenue reports, as well as other important retail metrics. 


Get more sales by using contactless payments

Cloud-based solutions are a great way to manage your retail business wherever you’re located. 

You need a processor to process in-store, contactless, and online payments. Get in touch with an expert Learn more about Small Biz Sense payments.

Cyndy Lane

Cyndy is business journalist with a focus on entrepreneurship and small business. With over a decade of experience covering the startup and small business landscape, Cyndy has a reputation for being a knowledgeable, insightful and approachable journalist. She has a keen understanding of the challenges and opportunities facing small business owners and is able to explain them in a way that is relatable and actionable for her readers.