Contactless, or tap-and-pay, transactions may have burst onto the scene during the height of the COVID-19 pandemic, but it isn’t new technology and it’s not going anywhere just because some of us think COVID is winding down. Consumers and merchants alike have enjoyed the benefits of contactless payments during the last year and that trend will continue into the future as more businesses adopt the technology.
A Visa Back-to-Business Study found that safety influenced how 78% of global consumers pay – due to the pandemic. Visa’s research also found that 46% of global consumers think “using contactless payment methods is among the most important safety measures for stores to follow.”
Even baby boomers have turned to contactless. Their preference for contactless increased from 45% before the pandemic to 55% today.
Consumers like the contactless option for payment for several reasons.
- First, the speed at which transactions can be completed. Chip and pin is quick, but contactless payments mean customers can pay within a couple of seconds.
- Second is the security. As the user only needs to tap the card onto the reader, the risk of fraudulent activity or theft seems a lot higher. However, built-in protection ensures that the same transaction doesn’t occur twice by accident and that if intercepted, the details and numbers linked to the card cannot be decrypted as unique numbers are used for transactions that don’t correlate to card numbers.
- Third is the convenience. With programs like Apple Pay you can use your phone to make purchases, or, with contactless cards, you can also make the payment from within your wallet without having to remove your card which makes the payment process even easier for the customer.
Contactless payments have been available for several years, but the public’s recent exceptance of this technology means businesses should embrace and offer it. It is no longer an exotic or quirky feature in a select few businesses, but rather a technology that customers are starting to expect.
Recently, large events, like music festivals, have adopted contactless technology. This year Country Fest, held in Cadott, WI, had the option to connect your wristband to your credit card. So, you could just scan your wristband and pay for merchandise or food and beverages. They also had an order-ahead option for their concessions, something a lot of festivals started doing in 2019, only now it’s expected to be an option.
One prominent supermarket chain in the Midwest made the point of placement of point-of-sale signage on their entry doors. That’s emphasis!
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More Facts:
- Outside the US, one card issuer reports 48% of all Visa transactions occur with a tap
- 80 out of the top 100 US merchants (by transactions) allow customers to tap at checkout
- 11 out of the top 25 US card issuers are now rolling out contactless cards
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What are some merchant benefits of Tap & Pay?
While there are benefits for consumers using contactless payment, there are benefits for merchants as well. Contactless technology does not generally generate additional processing fees. Businesses pay the same fee applicable for a transaction with a “regular” credit card. The speed of the transactions can increase productivity (and presumably sales) by getting people through checkout more quickly. Using contactless payments can also reduce costs. Potential staff reductions might be in order at high-volume retail operations as the time required to handle and sort out cash is reduced.
By offering contactless options to customers, businesses provide a much-improved customer experience option, perhaps differentiation from competitors.
As more people get a chance to experience contactless payments as part their daily routines, tapping-to-pay will become second nature for convenience-driven consumers everywhere. Businesses that create awareness around their contactless payment acceptance will win more customers this year and be better positioned for growth.