Contactless payments: Everything you need to know

Contactless payments (also known as "touchless payments") are a secure payment method that allows consumers to pay by tapping or waving their contactless card or phone against a payment terminal.

It's a fast and straightforward process for consumers. As long as the retailer uses payment terminals that can accept contactless payments, customers are able to effortlessly hold their phone or contactless card close to the device to complete the transaction. Sweet.

Contactless payments rely on two types of technology: Radio Frequency Identification (RFID) and Near Field Communication (NFC). RFID consists of tags and readers that spot an object, like a credit or debit card, via radio waves.

On the other hand, NFC is a short-range wireless technology that allows two devices to communicate when placed close to each other. This technology connects smartphones, tablets, wearables (like smart watches), and contactless cards. It's most commonly used for payments, coupon downloads, as well as the exchanging of business cards.

How long do contactless payments take to process?

Lightning fast.

Contactless payments usually take a mere few seconds to process and can be even faster than traditional card payments (i.e., swiping the card or keying a PIN). 

When a customer taps their card, phone, or wearable device near a contactless payment terminal, it reads the information, authorizes the transaction, and completes the payment process in a few seconds. Because of its fast processing time, contactless payment is both convenient and efficient – a popular choice for customers looking for seamless ways to pay.

How secure are contactless payments?

Contactless payments are more secure than traditional magnetic-stripe cards, which are far easier to clone. They are also harder to hack as they are authenticated payments – the data associated with your credit or debit card on file is encrypted and constantly changing.

This means that contactless payments are not only faster than traditional card payments but also more secure to boot.

There are two main types of contactless payments: credit and debit cards or phones (mobile apps or digital wallets). Customers tend to have specific preferences when it comes to contactless payments, which is essential to cater to – 55% of consumers will leave a store if they are unable to pay how they want for a product or service.

Contactless credit and debit cards

Most credit and debit cards have NFC technology, which enables them to be tapped or held close to a card reader for contactless payments. However, not all cards have this capability – especially the older ones – but it's a trend that we can expect to see more of in the coming years.

Mobile payments

Contactless cards aren't the only way for your customers to tap to pay. Digital wallets like Apple Pay, Google Pay™️, and Samsung Pay also use NFC protocol. Shoppers can use their phones to access these digital wallets and complete in-store transactions without their physical credit or debit cards.

Additionally, digital wallets are helpful for making larger purchases as customers can use them to authorize amounts over the limit on contactless payments (more on that below!).

Like other payment methods, contactless payments also have its benefits and disadvantages. Here's a list of the pros and cons of enabling customers to pay with contactless payment methods.

As most modern in-person payment terminals are NFC-enabled, it might be pretty simple to start accepting contactless or touchless payments with them.

Contact your payment service provider, who can guide you through accepting contactless payments through your existing payment hardware.

As more and more credit or debit cards come equipped with NFC technology, contactless payments will only grow in popularity in the near future. Get ahead of the curve and start building payment experiences that include contactless payments to meet the rising expectations of your customers.