In the last several years, the use of contactless payment systems and mobile payment technology has skyrocketed. With the arrival of COVID-19 in 2020, that use has continued to grow, as businesses and customers are searching for the safest options possible to continue to do business.
Besides health reasons, mobile and contactless payment options are growing in popularity because of their simplicity, convenience and speed.
Both emerging payment technologies are made possible through digital means and do not involve physical contact with cash or cards.
Although contactless payment systems and mobile payment technology have some things in common, they also are very different. In this article, we will take a look at both contactless payment systems and mobile payment technology and explain how they both work, the advantages of each, their origins and how we can help you implement them for your business.
Contactless Payment Systems
As the name suggests, contactless payment systems involve payments made through any medium not using actual physical cash. All transactions are completed electronically through a wireless technology called Near Field Communication (NFC). Contactless debit and credit cards are the most common payment methods in these systems. Inside each card is an encoded memory chip that stores the customer’s financial information, making it essentially a minicomputer. These cards also come with a wireless antenna which allows the contactless connection between the cards and the business’s card readers or NFC readers.
Unlike traditional card payments, these cards are not inserted into a card reader or swiped. Thanks to NFC technology, all you need to do is bring the card near the reader or give a slight tap to establish a connection and initiate a transaction.
One of the first examples of contactless payment systems was a system called Speedpass in 1997. Mobil gas stations offered contactless payment devices that clipped onto a key ring and customers waved the device over a square at the gas pump to pay instantly.
Mobile Payment Technology (Customers)
When it comes to accepting mobile payments customers can pay using mobile banking apps and mobile wallets. Mobile payment technology essentially works the same way as contactless payment systems; however, instead of using cards, a smartphone or other mobile device is used to initiate the transaction.
Mobile Banking Apps
Nearly every bank in the country now has its own mobile app that customers can use for making banking transactions across the globe. Customers download the mobile app on their smartphone or other smart device and then use the app primarily for paying bills or transferring money. Instead of using short-range radio waves like the NFC technology, a Wi-Fi connection or broadband wireless internet connection is used to handle these transactions.
Mobile Wallet System
In the mobile wallet system of payment, a customer’s credit card details are saved in an app, or an e-wallet. You’ve probably heard of Apple Pay or Android Pay, two of the most common forms of mobile wallets. The mobile wallet system is similar to the contactless payment system because it uses the same NFC technology. Once you unlock your smartphone and open the e-wallet, place the device near the reader and the connection will initiate.
When they were originally created, mobile payment technology and mobile banking used text messages to complete transactions. As technology evolved, companies have moved on to using mobile apps and mobile contactless payment systems that do not require texting.
Mobile Payment Technology (Merchant)
Being able to accept mobile wallets is becoming an expectation for merchants. To truly be involved and understand mobile payment technology from a merchant perspective there are certain technologies to consider. Let’s take a look.
For the business owner on-the-go, having the ability to accept payments from anywhere is important. With the use of mobile terminals, businesses no longer need to carry a physical POS terminal with them. Mobile terminals are payment portals that operate on a smartphone or connected tablets. Businesses can use a smartphone or tablet to log into a virtual terminal and manually enter credit card information.
Mobile Browser Payments
Providing the option to buy or sell online is becoming more and more important in the world that we live in. With mobile shopping making up 73% of e-commerce sales it is essential to provide an e-commerce solution such as a payment gateway or hosted checkout that is mobile friendly. Using their mobile device, customers should be able to add the products or services to their cart and complete their transactions by entering their payment details into the website’s checkout section.
Mobile App Payments
From restaurants to clothing stores to any business in between, having a mobile app where customers can shop and make a purchase is a growing trend. To power an app that a merchant has developed for their business, it is important to consider an e-commerce payment processing solution that will enable businesses to accept card payments placed over the internet in the app. Customers only need to register their credit or debit card information into the app once, and then they can make their purchase.
Pros and Cons of Contactless Payment Systems & Mobile Payment Technology
What do customers think about these emerging payment technologies? Retailers have upgraded their point-of-sale terminals to accept both types of payments, meaning the technology will have the chance to grow as long as customers continue to feel safe using it.
According to a report from Auriemma Research, customers who prefer contactless card payments say they are faster, easier and more secure than mobile payments. In a strange twist, mobile payment users say the same thing when asked why it is better to pay with mobile. Concerns surrounding contactless card payments include security and being forced to still have to use their card if the system isn’t working properly.
Let MONEXgroup Help You Set Up Mobile & Contactless Payment Systems
Now that you know all about mobile and contactless payments, it’s time to find out how MONEXgroup payment solutions can help your business. MONEXgroup offers a variety of contactless payment systems and mobile payment technology options. If you’re looking for a countertop POS system, Clover in-store merchant processor solutions offer flexibility for your daily needs so you can run your business smoothly and efficiently. You can use Clover as either a contactless payment terminal or for mobile contactless payment. We also provide e-commerce payment solutions for merchants looking to integrate or improve their online websites. If you need an unattended payment kiosk for a laundromat, car wash or parking lot, our unattended payment solutions offer both mobile and contactless payment options that benefit your customers and your business.
Contact us to get a quote today and find out how MONEXgroup can help you uncover the benefits of contactless and mobile payments.
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Author: Layal Scheirich, Head of Sales at MONEXgroup
Bio: With 18 years of experience in payment processing and merchant services, Layal has seen in-store POS technology evolve from its humble beginnings to contactless, unattended, mobile and online alternatives. Today, Layal is an inspiration to the MONEXgroup’s team and a go-to source of information related to payment processing. She is enthusiastic to share her knowledge with audiences interested in cutting-edge technologies available today, such as unattended payment for self-serve kiosks, e-commerce online payment gateways, virtual terminals, and contactless and mobile payment solutions.
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