Tap-to-Pay Payment Processing – Here to Stay
As the name implies, “tap-to-pay” means that customers can make purchases without physically inserting or swiping cards into a point-of-sale device, entering PINs, signing their names, or completing any other interaction with the cashier or POS system.
Contactless payments are powered by near-field communication (NFC) technology. NFC-enabled credit and debit cards have an “antenna” chip that communicates via radio waves with the POS system or specific tap-to-pay card reader. Mobile wallets, such as Apple Pay, Android Pay, and Samsung Pay, also work on all NFC contactless readers. NFC transactions take place over a specific radio frequency that enables the debit card, credit card, or smartphone to “communicate” with the payment reader at very close distances.
With the growth in contactless payment adoption and usage in the United States, businesses that are looking for fast, secure, convenient, and scalable ways to evolve their payment processing capabilities should consider adding tap-to-pay functionality to their POS systems. This article will explain what is fueling the growth of contactless payments and how you can equip your business to accept tap-to-pay payments.
What is Fueling the Growth of Contactless Payments?
Although contactless payments are ubiquitous in many parts of the world, especially Europe and Asia, the trend never really took hold in the United States despite us being one of the earliest “adopters” of a contactless card. For comparison, although the first contactless cards were deployed in the United States in 2003—almost a decade earlier than in Spain—contactless payments in the U.S. accounted for just 0.32% of all point-of-sale transactions in 2016 compared to almost 20% in Spain, according to an analysis by A.T. Kearney. But like most things, COVID-19 has changed consumer purchasing behaviors, and so the time for widespread contactless payment adoption has finally arrived in the United States.
As social distancing and hygiene have become more important, shoppers are increasingly paying in ways that don’t involve touching cash, handing over a credit or debit card, or physically interacting with cashiers in any way that might expose them to the coronavirus. As a result, tap-to-pay and other contactless payments have become increasingly “normalized” in a country that has been slow to adopt new transaction technology. In fact, Mastercard reported a 40% increase in contactless payments (including tap-to-pay and mobile pay) during the first quarter of 2020 as the global pandemic worsened.
Although COVID-19 was initially driving up adoption and usage of tap-to-pay payment processing and other contactless payment methods, experts predict that these transactions will become the leading payment methods in the United States well after the pandemic. As more consumers embrace contactless payments, they will come to enjoy (and expect) the benefits of tap-to-pay.
Benefits of Accepting Contactless Payments
As mentioned, although COVID-19 has been the driving force behind contactless payment growth in the United States since February of 2020, customers and businesses alike are realizing there are many more benefits of tap-to-pay transactions that will continue to drive adoption and usage of tap-to-pay payment processing.
Benefits for Customers
- Faster transactions – Compared with cash, cards, and checks, payments made using NFC technology are significantly faster. Customers can complete their transactions in seconds (or as long as it takes them to pull out their contact-enabled card or mobile wallet). Even after the pandemic, consumers will likely not want to revert to slower payment methods now that they know how quickly their payments can be processed using tap-to-pay technology.
- Secure transactions – NFC technology is remarkably secure. Although not more secure than modern chip-enabled credit and debit cards, combined with faster transactions, the security of tap-to-pay transactions gives consumers peace of mind that they are not sacrificing convenience for security.
- More convenient transactions – Speed and security translate to more convenience for consumers. As more consumers add their debit and credit card information to their mobile wallets or adopt tap-to-pay enabled cards from their banks or credit card companies, the ability to complete contactless transactions at more businesses provide greater convenience as it means that more of the places they love to shop allows them to complete transactions the way they love to pay.
Benefits for Businesses
- Greater customer satisfaction – Faster and more convenient transactions ultimately lead to more satisfied customers. By adopting tap-to-pay and contactless payment technology, businesses can ensure that they are providing customers the seamless, “frustration-free” checkout experience they are looking for. And as you already know, satisfied customers are more likely to return more frequently, which could translate to a growth in sales.
- Improved operational efficiency – Tap-to-pay technology reduces the number of cashiers needed, or at least the amount of time “front-counter” staff need to spend processing cash and card transactions. This means employees can spend more time stocking shelves, making products, cleaning, and doing other “value-add” services around the store. And as contactless payments go up and cash payments go down, managers and owners can devote more time to other tasks and less time to counting cash at the end of the night.
- More accepted payment types – As more consumers adopt contactless payment methods (including mobile wallets), businesses that accept these payments will be able to process more transactions from customers that might not carry cash. It may only be a small number of customers, but every transaction counts for small businesses, and being able to accept the widest array of payment types will ensure that you can always “ring up” customers no matter which method they prefer.
How to Accept Tap-to-Pay On-the-Go
If you operate a mobile business or participate in “pop-ups” like farmers markets and swap meets, you can enjoy (and provide) all of the benefits of contactless payments using a mobile tap-to-pay card reader. Use your iPhone, iPad, Android, tablets, or any other mobile device to process contactless transactions on-the-go.
Are You Equipped to Accept Contactless Payments?
If you are interested in learning more about adopting tap-to-pay payment processing technology in your store, Core Financial Processing can help. As your trusted merchant services provider, we help you with the products and solutions you need to accept all forms of electronic customer payments, including NFC-enabled tap-to-pay cards and mobile wallets.
Core Financial Processing is committed to providing innovative and affordable payment processing solutions that help you stay competitive, save money, and eliminate the headaches and hassles traditionally associated with payment processing. Get in touch today and learn how quickly we can set you up with a tap-to-pay payment processing system!