Touchless payment options are on the rise as retailers and consumers alike strive to make doing business safer and more secure. Globally, the contactless payment market size was valued at $1.34 trillion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 20.3% from 2021 to 2028 according to Grandview Research.
This article will take a look at the basics of contactless payments, how contactless cards work and how MONEXgroup can help your business implement them.
What Is a Contactless Payment?
Contactless payments give customers the ability to submit payment without their card or device ever leaving their hand, increasing their sense of security.
Since the COVID pandemic hit in March 2020, credit card issuers like Visa and Mastercard have seen a huge increase in contactless payments.
How Do Contactless Payments Work?
You’ve likely heard the term NFC, which stands for “near field communication.” NFC is the technology that allows contactless payments to be processed using a specific type of radio frequency identification (RFID). NFC transactions process using a specific radio frequency that enables the shopper’s card or smartphone to interact with the payment reader when they’re close together or with a simple tap. With the rise of the COVID-19 pandemic, retailers have been quick to upgrade to NFC-enabled payment terminals, making touchless payment options even more common.
Are Contactless Payments Secure?
Many people use smartphone apps for anything from ordering pizza to following their child’s school progress. As a consumer, you might be hesitant to use your phone for financial transactions but they actually are much more secure than using a magnetic stripe card. The outdated technology in magnetic stripe cards makes them relatively easy for criminals to clone and go on a shopping spree with your money. More modern cards embedded with chips are also more secure and safer for consumers to use.
Contactless payments are extremely hard to hack. When a contactless payment is processed, a one-time token is sent to the merchant’s payment terminal. This tokenization process provides only limited information from the shopper’s private accounts to process the request. After the transaction has been completed, that token cannot be used again. So even if fraudsters were to hack a system, the data they found there would be useless.
Types of Contactless Payments
There are two types of contactless payment options – mobile apps or wallets and contactless technology built into credit and debit cards.
Three of the most popular contactless payment apps are Apple Pay, Google Pay and Samsung Pay.
Apple devices come equipped with the Apple Wallet app. Apple Wallet allows users to store their credit and debit card information onto their device to purchase things in stores. The system also allows online purchases and lets users send money to friends and family.
Google Pay users can make contactless payments securely at participating brick-and-mortar and online retailers via the Google Pay app. Instead of using an actual credit card number, Google shares an encrypted number that is linked to the user’s card with the retailer. Users also have the option to send and receive money by using an email address or phone number.
Samsung has also launched a digital wallet for use on Samsung compatible smartphones and devices, allowing users to store their credit or debit card information on the app for use at store terminals. Samsung Pay users also have the chance to earn cashback and other rewards when they use their phones to make purchases.
What Is A Contactless Credit Card?
You may be wondering how contactless cards works differently than their more antiquated magnetic strip cards. Contactless credit cards have a small chip embedded in them. Although this method is often referred to as tap to pay, no actual tapping is needed. The embedded chip emits short-range radio waves, and when your card is placed within a few inches of a contactless-enabled payment terminal, your payment information is transferred.
Benefits of Contactless Payments For Businesses
Contactless payments are beneficial for consumers because of their convenience and safety, but businesses who utilize them will see benefits as well. Businesses that offer more than one payment method usually see an increase in revenue. Contactless payment solutions can help your business by providing secure transactions, fewer fraud losses and increased customer satisfaction.
Discover the Contactless Payment Solutions Available From MONEXgroup
Whether you are in the market for in-store or on-the-go touchless payment options, MONEXgroup has you covered. We have the contactless payment processing solutions you’ve been searching for. We would be happy to have one of our friendly staff members discuss your specific needs and answer any additional questions you may have.
Contact our experts today and see how we can help your business implement effective contactless payments into your process.
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