Contactless Payments are the Right Way to Go…
In the aftermath of the Covid-19 pandemic, consumers are much more conscious of what they touch, meaning contactless payments won-out as a fast, easy and sterile money transaction.
But what exactly are ‘contactless’ payments?
Contactless payment systems include credit/debit cards, smartcards, key-fobs, smartphones or wearables that use radio-frequency identification (RFID) or near field communication (NFC). This technology makes paying for goods and services fast and touch-free.
Until recently, contactless payment systems never quite achieved the mass popularity predicted by market-forecasters, with customers preferring the familiar swipe, dip, PIN-entry, and signature forms of payment authorization.
But that’s quickly changing…
Did you know?
- The USA increased limits from $100 and upwards, and thousands of stores on-boarded new contactless payment terminals to cater for demand.
- Contactless payments complete within 15 seconds!
- NFC technology can interact with accessories such as watches or rings.
- There is no extra charge for the consumer making a contactless payment.
Contactless Payments 101
This month’s takeaway download is an excellent summary of all things ‘contactless’. If you run a business or plan on using one of these smart systems now or in the future, our Redhead Roundup June freebie makes for a super-sensible read…
How Safe are Transactions?
Juniper Research discovered that more than half (53%) of global transactions at Point of Sale would be contactless within the next five years. The Chip and PIN system is relatively secure. However, contactless payment using Apple Pay or Samsung Pay through a cellphone is more protected, because each device requires the owner to be physically present to unlock it. In other words, a cellphone payment is more secure than a contactless tap-touch transaction.
The take-up of contactless payment has been quick in some countries, but the US is still a little way behind. However, trends are showing that things are changing. Plus, some innovative new tech is fast taking hold. For example, the world’s first dual-interface metal cards were released this year.
These elite cards allow a contactless payment on both sides of the card, a popular choice for the wealthy VIP wanting to make a statement.
Peer-to-Peer (P2P) payments, where shared payments between friends, are fast becoming the norm. Several apps allow for split payments. Transactions such as paying for groceries, utilities, and takeout can be split between friends.
P2P payments come in handy when you need to pay back a friend or neighbor without exchanging cash face-to-face. Great for the no-touch philosophy we have all taken on board at the moment.
How Does P2P work?
Say you’re out to dinner with your sister Sarah and you want to split the check. Instead of fumbling around for notes and coins, Sarah pays the whole check using her contactless card. You then pay Sarah your half of the meal by using your P2P app of choice. Pick Sarah from your contact list, type the amount you want to send and your PIN (if you have one), and hey-presto, Sarah has your contribution towards the dinner. Sarah can choose to leave your payment in her P2P account for the next time it’s her turn to pay, or she can transfer it to her bank account.
Contactless payments are widely accepted in Europe and Asia with Oceania closely following behind. However, America has yet to see a shift in the general public and business owners embracing this technology. But like I said earlier, I’m sure the transition to the US being a part of the Smart Nation ecosystem is in the not too distant future.
Maybe one day, we will be paying our house deposit through a contactless payment system. With the deep connections between blockchain, cryptocurrencies, and the IoT, I don’t think we’re far off!
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