The pandemic changed a lot of things about the way your customers shop, including an increased interest in contactless or "touch-free" payments. Businesses are looking for ways to accept payments without their employees handling cash, and customers want to avoid handing over their credit cards or touching a payment terminal.
As contactless payments grow in popularity, it’s important to understand how they work. Learn about the technology—including different types of methods like scanning a QR code using a payment app or tapping a credit card over the checkout terminal—plus the benefits of offering touch-free payments. Contactless payments help keep customers and employees safe, while improving checkout speed and security. When shoppers know they have touch-free payment options, they're more likely to feel comfortable shopping at your store.
The more common contactless payment technologies can be grouped into two categories, depending on the equipment required by you and your customers. On one side, there are contactless credit and debit cards or digital wallets like Apple Pay or Google Pay. Then there are QR codes that can be linked to your business, so customers can scan, pay, and go without making contact.
Whether a credit card can be used for touch-free payments depends on the actual card itself. Credit card companies have worked hard to transition from swipe-only technology to secure EMV chips, but some chip cards don't have the embedded antenna needed for touch-free payments.
You can tell if a customer's card can make touch-free payments by looking to see if it has a wireless wave-like symbol on it. If not, the customer can still pay touch-free using their smartphone to scan your payment QR code.
Accepting touch-free payments is key to reaching digital-native consumers like Gen Z and millennials, with more than 70% in both categories saying that digital payment options are a deciding factor in where they shop.1 That said, digital payment methods are popular with shoppers of every age: Nearly 55% of Gen X and 46% of baby boomers and seniors also say digital payment options are important for in-store shopping.1
There are many benefits of contactless payments, from added convenience to increased payment security to faster checkout.
Tap-to-pay and digital wallet transactions don’t include a customer's account details, like their name, account number, card expiration date, CVV, or PIN, which is why some consider them more secure than traditional credit card payments. What’s more, contactless payments use a wireless, secure connection between a shopper's touch-free payment method and the payment terminal. In the process, a one-time code (also known as a token) shares the encrypted payment information with the terminal—and that token changes each time a customer makes a purchase with their digital wallet.
In other words, if someone steals the contactless payment token, it still won’t work for another transaction. It’s worth noting a contactless payment transmission travels, on average, just a few inches, making it unlikely that a hacker could get close enough to intercept it without someone noticing.
Either way, contactless payments require the customer to physically initiate the transaction, making it difficult to send a contactless payment accidentally. In the same way, QR code payments provide added security given they require the user to unlock their phone and/or enter a code to complete a transaction.
Contactless terminal payments usually require only a single action, like tapping the card or pushing an app button on a smart device. Making a QR code payment takes just two steps: scanning the code and entering the amount to pay. Customers can be on their way faster when they're not swiping a card and signing a receipt or handing over cash and waiting for change.
You need a near-field communications (NFC)-enabled payment terminal to accept touch-free payments from a card or phone. A typical process may go like this:
However, you don't need any special hardware to accept QR code payments. Once you've created a QR code, just display the code where shoppers check out. Your customer scans the QR code using their payment app, enters the amount to send, and then pays.
Tap card payment systems are critical for in-store shopping, allowing customers to pay at their favorite places like retail shops, restaurants, grocery stores, pharmacies, vending machines, and more. In fact, 57% of consumers say a merchant's digital payment offerings impact their willingness to shop in their stores1, with 26% saying stores must accept contactless credit card payments for them to feel comfortable going inside for shopping.1
Tips to make the touch-free payment process easy for your customers and staff:
There are many options when it comes to contactless payment methods. Here are some of the most popular ones merchants can offer:
Touch-free is likely the future of in-person transactions. Contactless payments help improve checkout speed and security. When shoppers know they have touch-free payment options, they're more likely to feel comfortable shopping at your store.
You can create a QR code to accept PayPal payments using the PayPal Business app or by signing up for a PayPal Business account. Learn more about accepting PayPal payments with QR codes.
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