New payment trends emerged in 2020 as consumers, out of necessity, tried new ways to make purchases. During the pandemic, people who had never placed an online order for curbside pickup experienced first-hand how convenient it could be. Now, according to a CommerceHub survey, 67 percent of consumers are sold on curbside pickup long term, compared to 59 percent when the pandemic started.
Although there has been unprecedented growth in online payments – ecommerce spending increased by more than 30 percent in Q1 and Q2 2020 – some types of transactions still had to take place in person. In those situations, many consumers often preferred options that didn’t require touching shared surfaces or allowing a cashier to handle a payment card. Business owners now have the opportunity to enhance customer experiences (with the help of their POS solutions providers) for those safety-conscious consumers by accepting contactless payments.
How contactless payments work.
Contactless payment transactions work similarly to EMV payments, using the same infrastructure and security. The major differences in a contactless payment process versus dipping an EMV card are on the consumer’s side. All that a customer has to do to make a contactless payment is tap or wave a smartphone with a mobile wallet app or a payment card embedded with a contactless chip near a card reader. Near-field communication (NFC), a form of radio frequency identification (RFID) technology, enables the contactless payment card or smartphone to communicate with the card reader to complete the transaction. Card issuers set a limit on the purchase amount for contactless card transactions as an extra safeguard. For purchases totaling more than that amount, the customer must insert the card into the card reader for authentication.
The number of contactless payment transactions increased in the U.S. in 2020, primarily due to the pandemic. Mastercard® reported a 40 percent growth in contactless payments worldwide in Q1 2020 and adds that more than half of new users plan to continue to pay via tap-and-go methods long term. The National Retail Federation research shows that merchants agree, with 94 percent of retailers expecting contactless payment adoption to continue through the next year, especially considering more consumers will have contactless cards in their wallets. Visa reports that the U.S. now has more contactless cards than any other market in the world at 175 million, and top issuers are continuing to roll them out.
Merchants need the right technology to accept NFC contactless payments.
To stay current with the contactless payment trend, merchants need to have the right payment technology integrated with their point of sale (POS) systems, including EMV technology, an NFC-enabled card reader, and a merchant account with a payment provider that supports contactless transactions. Most merchants also need a POS solution provider with expertise in their market or niche to correctly configure their system with the features and security measures they need.
A good option for businesses that don’t have up-to-date POS technology but want to quickly add contactless payment options is deploying a Payanywhere Smart Solution. These smart solutions allow merchants to accept EMV contactless payments, as well as traditional payment methods. They also give merchants new functionality, such as tracking inventory, employee management, and increasing visibility into their operations with real-time reporting.
Additional options for creating touchless payment experiences.
With a flexible, omnichannel payments platform, solutions providers can also devise other ways to eliminate touch from their clients’ payment processes. One solution that merchants with online payment capabilities can deploy quickly is QR code payments. This enables the merchant to print a code that customers scan with the cameras on their smartphones. The QR code link directs the shopper to a PCI-compliant, secure payment page, similar to an ecommerce checkout page.
QR code payments are easy for consumers – they don’t have to download anything to use it – and for merchants using a payment solution that supports ecommerce, they can deploy it quickly, without the need to purchase hardware.
Similarly, merchants can text a link to customers so they can pay on their phones, eliminating the need to touch any devices at the checkout.
Demand for touchless and contactless payments solutions will continue to be high.
NFC contactless payment solutions and other paths to touchless payments are now in high demand. Retailers, restaurateurs, and other merchants with limited time and IT expertise need your expertise to help them choose the best option and implement it so that it works securely and reliably. Take this opportunity to grow your business by stepping up to help your clients as they meet new and prepare for whatever lies ahead.