What is Contactless Payment and How Does It Benefit My Business?

As technology advances, innovators constantly devise new ways to simplify how we carry out our daily tasks. Contactless payment using an online payment gateway is one of these cutting-edge technologies that aim to improve the purchasing experience for customers.

On this page, we'll go over the fundamentals of contactless payments as well as three advantages of implementing this technology in your business. Continue reading to find out more.

Background on contactless payment

If you don't know what contactless payment is, the key is in the words. Contactless payment is a method of paying for goods and services that do not require the use of a debit or credit card. Contactless payments, unlike debit and credit cards, never make contact with the point of sale (POS) terminal.

When you shop at your favorite store, you either swipe or insert your credit card into the POS terminal. Your bank information is stored on the magnetic strip on your card, allowing the retailer to deduct the appropriate funds from your account. This magnetic strip was introduced in 1950 and is still found on major credit cards today.

The problem with this magnetic strip is the possibility of fraud. When all of your bank information is stored on a magnetic strip, hackers can easily steal your information and make fraudulent charges. Even with the evolution of chip cards, there is still a significant risk of your bank information being compromised, especially if retailers have not updated chip card readers.

As a result, technology experts created contactless payment. Mobile devices, watches, and other wearable devices can be used to pay for goods and services. It expedites and simplifies transactions.

How does contactless payment work?

Near field communication (NFC) technology is used in contactless payments. It employs radio frequency identification (RFID), and when devices are within centimeters of the POS terminal, they communicate with the payment reader. Payment information is transmitted via RFID when you tap or wave your device over the payment reader.

What are some examples of contactless payment providers?

When you walk into a retail store, you'll notice a symbol that looks like the Wi-Fi symbol, indicating that you can pay with your phone using contactless technology. To indicate that they accept that type of payment, some retailers will include the name of the payment provider. Here are three of the most well-known contactless payment service providers.

3 benefits of contactless payment

Using contactless payments has numerous advantages. These advantages benefit both consumers and merchants.

1. It’s more secure than regular bank cards

People were initially concerned about the security of paying with their phones when this technology was first developed. After all, what's to stop a hacker from breaking into your phone and stealing your credit card information? Many customers perceived that storing bank information on their phones made it even easier to access.

The exact opposite is true! These contactless payment methods using the best online payment gateway are more secure than traditional bank cards. They are authenticated payments, making them difficult to hack. Not to mention that the information on your card is encrypted and constantly changing for your safety.

As a result, even if a hacker steals your information from one of these contactless payment providers, they will not obtain any valuable information. They won't be able to obtain information that will help them hack your account because your data is constantly changing.

Contactless payment is far safer than traditional debit or credit cards. These cards employ antiquated technology, making them easy to hack and duplicate. It results in the loss of identity and the imposition of fraudulent charges.

Contactless payment is the way to go if you want to feel safe about your transactions.

2. Quicker checkout

People in today's fast-paced world want to get out and move. They do not wish to stand in long lines. You can speed up the checkout process and get your customers out the door faster by accepting contactless payments.

You do not need to enter your pin or sign for anything when using contactless payment. This is true up to a certain price limit set by the contactless payment provider. You will be able to check out quickly and efficiently. Even if you must enter your pin or sign for larger purchases, the process is significantly faster than using a card.

Contactless payment eliminates the need to carry cash, count change, or pull your credit card from your wallet. Because most people have their phones in their hands (or in an easily accessible location), it allows for a faster and smoother checkout process.

Customers do not want to stand in line. They can complete their transaction in a matter of seconds if they can use contactless payment. This gives your customers a better experience and allows them to get on with their day more quickly and efficiently.

It's also excellent for the online experience. When people buy products from your eCommerce store, they don't have to take the time to reach for their wallets and insert their credit cards. They can use contactless payment to make a quick purchase and get back to their day.

Contactless payment is ideal for applications other than retail. Public transportation, parking lots, and toll booths are all excellent locations for contactless payment. They can help to keep traffic or lines moving and make it easier for users to pay.

3. Allows companies to handle more customers

You can take on more customers if you reduce the time it takes to complete a transaction. More customers equal more sales for your company. It is extremely beneficial to your company's growth.

People, as previously stated, do not want to wait in long lines to check out. Long lines, in fact, may deter people from making a purchase. You don't want to lose conversions because customers who want to move quickly in and out of your store have to wait too long.

By accepting contactless payments, you can speed up the checkout process. You’ll move your line along and encourage more people to wait in shorter lines. Not only will you earn more conversions, but you will also make your customers happy because you reduced their wait time.