Remember all those futuristic movies we watched years ago, where characters were constantly calling each other on video phones? It seemed amazing and impossible when we were still tied to landlines, but now here we are, video chatting with each other while simultaneously paying for our coffee using contactless payments. We’re living in those movies we used to watch, and we barely blink because it all feels so normal now.
Take contactless payments, for example: just hover your credit card or smartphone in the air over a payment terminal, and you’ve made a purchase. As more and more consumers use this way to pay, it makes sense for businesses to meet them there. Here’s a quick primer on what contactless payments are, how they work, and how they can benefit your business:
What are Contactless Payments?
A contactless payment is any transaction that eliminates the need to physically swipe a card, write a check, or handle cash. While online payments are one way to go contactless, the term more often applies to in-person, tap-and-go transactions you’d make with a contactless debit/credit card or mobile wallet like Apple Pay, Google Pay, or Samsung Pay.
Although contactless payment options have been around for decades, they surged in popularity during the Covid-19 pandemic and have been growing since. A 2020 MasterCard study of 17,000 consumers across 19 countries revealed that nearly 80% were using contactless payments, with steep growth in the early months of the pandemic.
How Do They Work?
Contactless payments rely on NFC (near field communication) technology to allow two items—for example, a customer’s credit card and your payment terminal—to securely “talk” to each other in order to complete a transaction.
Most banks and credit card companies now issue NFC-enabled cards, and today’s devices, from smartphones to smartwatches, are also NFC-equipped. This lets consumers use digital wallets like Apple Pay, Samsung Pay, or Google Pay to make purchases with their phone, for instance.
NFC technology relies on a circuit chip and antenna embedded in the customer’s card or smart device, enabling it to communicate with your payment terminal. When a customer places their payment method near the terminal, it sends a secure, one-time token allowing the transaction to go through. This unique token can only be used to make that particular purchase.
How These Can Help Your Business
Contactless payments are gaining popularity for a reason. Here are the key benefits they bring to businesses and consumers alike:
- Added hygiene. Contactless payment methods eliminate the need for cash or cards to exchange hands, reducing the spread of germs. In fact, Mastercard’s 2020 study found that safety and cleanliness were key reasons consumers preferred contactless payments.
- Greater security. Because contactless payment technology uses a one-time encrypted token for each transaction, sensitive details like customer names, card numbers, and security codes are secure. There is no point at which they’re stored or processed by the system.
- Convenience and speed. Customers pay with just a quick hover of their card or device. While swipe- and chip-card transactions may be faster than paying with cash, contactless payments are even faster.
- Ease of use. One of the main reasons people are going contactless is because it’s just so easy. There’s no need to sign a receipt, enter a PIN, or dig around for cash (and wait for change). There’s also no need for a bulky wallet (or any wallet, when their smartwatch can even pay for things!).
Making Contactless Payments Work for You
Offering contactless payment is one way to serve your customers while staying on top of new technology. However, it shouldn’t be the only way, because not everyone is ready, able, or willing to make payments this way. That’s why it’s important to have plenty of options for all the ways customers prefer to pay—including online forms, electronic invoicing, payment via mobile app, and in-person POS.
The good thing about using The Studio Director is that it integrates with PaySimple, so you can securely process a variety of transactions. These include bank transfer, recurring ACH payments, credit/debit cards, payment via online forms or mobile, and even contactless payments!
Let The Studio Director simplify your payments, class registrations, and more! Get started with a free trial or contact us for more information today!