Contactless payments are here to stay, amidst growing awareness and willingness amongst consumers to use them. Two in three Europeans now use contactless payments. In the Nordic region, eight in ten card payments were contactless in 2021, with over 90% of consumers using them pretty often. Digital wallets are the most-preferred payment method of most people, with 44% of Europeans using some kind of e-wallet app to make contactless payments.
Newer payment methods are emerging as alternatives to cash, which enable a smoother and superior checkout experience. Accepting contactless payments has become necessary for all businesses. As the payment industry continues to evolve, small business owners are feeling the need to keep pace with changing trends and consumer preferences even more.
But, what are contactless payments?
Contactless or Touchless payments are a convenient and super-fast way for consumers to pay for in-store purchases. A customer can make contactless transactions using a debit or credit card, a smartphone, or other smart devices, such as a fitness tracker or a smartwatch.
At checkout, customers wave or tap their card, or smart device, in front of a contactless terminal, and the payment happens automatically. Customers don’t need to enter a PIN to authorize the transaction. These payments securely transmit information between two devices using Near Field Communication (NFC) or radio frequency identification (RFID) technology.
Why Should Your Business Accept Contactless Payments?
Safety, speed, and convenience are some of the main reasons why people prefer to use touch-free payments. Whether it’s in-store or online, shoppers look for payment options that are secure, fast, and easy to use. Not finding a payment method of their choice is one of the reasons why buyers abandon their shopping carts.
Businesses that accept contactless payments can offer a simple and convenient checkout experience to their customers. This, in turn, strengthens their customer’s loyalty to the brand. Contactless payments also have better security and fraud prevention features as they follow the Payment Services Directive (PSD2) rule which makes them ideal for businesses.
Valuing your customer’s safety and convenience helps you stand out as a brand in a highly competitive market. And in Europe, where e-commerce and the use of contactless payments are on the rise, your business must keep adapting to these innovations and technology.
How Can Your Business Accept Contactless Payments?
Let’s take a look at some of the best contactless payment options for your business.
1. NFC-enabled Mobile Payments
NFC mobile payments are fast, secure, and zero-touch. Customers can pay touch-free by holding their NFC-enabled card (contactless cards by Visa, Mastercard, etc.) or mobile device (smartphone, smartwatch, tablet) close to an NFC reader at the merchant checkout terminal. Users can also tap and make in-app payments to directly transfer money from their account to the merchant’s account.
NFC or near-field communication is based on RFID or radio frequency identification. This technology enables fast, secure, and easy sharing of encrypted payment information between an NFC-enabled POS terminal and a mobile device like an Android or Apple phone.
Customers can use their digital wallet apps such as PayPal, Apple Pay, or Google Pay to make such payments. They can also pay using contactless cards from major card schemes, including Visa and Mastercard.
2. QR Codes
The flexible nature of QR technology and the relatively low merchant fees has led to its popularity as a payment option. This is a fast, secure, and easy-to-use payment method that is also cheaper and easy to set up. Merchants can set them up in-store or on their website. Plus, it also enables you to track payments more easily.
Customers can pay using major mobile wallet apps such as PayPal, Apple Pay, or Google Pay.
With a QR code, customers don’t need to type in card details or share a PIN. Rather, they just scan the merchant’s QR code to initiate the payment and then confirms it from their mobile banking or mobile wallet app. The payment is then securely processed and both parties receive a confirmation via email or text. QR code payments can be initiated both by the customer and the merchant.
QR codes also enable a business to offer discounts and promotions at checkout. And most of them have other value-added services (like providing customers additional info about a product or service) which can be used by businesses to improve the customer experience.
3. Tap to Pay
Tap to Pay is a flexible, low-cost, and highly secure payment method that works through NFC and RFID. It uses tokenization, encryption, and biometrics to authenticate payments and ensure they are secure and protected from fraud.
Tap to Pay lets a buyer make a payment with a contactless chip-enabled card, a wearable device, or an NFC-enabled smartphone. Users simply need to tap or hover their card/device over the merchant’s POS machine or phone to authorize a payment. The encrypted payment info is shared wirelessly across an electromagnetic field between the two devices and is transferred to the processor. Once the processor verifies the payment and authorizes the transaction, both parties receive a confirmation alert via email or text.
Another option is Tap on Phone, which allows merchants accept contactless payments using their mobile phones. Most phones and wearable devices nowadays are NFC enabled, so all you need to do is download the app, link it to your bank account, and you’re ready to accept payments.
Reports state that contactless card payments now account for 50% of all in-store card transaction values across the EU. The proportion of POS transactions made using mobile apps has also increased since 2019.
How can Novalnet Help?
Keen to get started with contactless payments but not sure how to go about it? We can help.
We are a global PSP with decades of experience in helping businesses find the most accessible solutions to their payment needs. Our technology helps businesses like yours to accept payments globally in 125+ currencies in 150+ automated country-specific payment methods. Set up your payments with minimal coding using our instant payment plug-ins.
Or use our AI-based risk management solutions and advanced analytics to design the best payment experiences for your customers, all in a fully secure environment. Reach out to us to know more about finding the most ideal and accessible payment solution for your business.
Jose Augustine is the Chief Business Development Officer at Novalnet with extensive experience in European payment industry and a knowledge powerhouse.