The pandemic has compelled us to go “contactless” in just about everything we do. From shaking hands to touching doorknobs, people are quite wary of contact.
It’s hardly surprising that contactless cards and mobile payments have become a far superior alternative to using cash, swiping/dipping cards, or keying in your card number to make payments.
A study by The Harris Poll found that 42% of consumers view tap-and-pay credit cards as the safest form of payment. An innovative payment method that was already on a high trajectory gained even more traction, courtesy of the pandemic.
In this article, we’ll explore the ins and outs of touchless payments including touch to pay and the benefits they offer. We’ll also discuss how they work and how you can easily implement touch to pay in your business.
TL;DR
- Touch-to-pay is a payment method enabling customers to make a payment by tapping their phone, card, or wearable device to the payment terminal. They work using NFC and RFID technology.
- Accepting touchpay at your business offers a myriad of benefits including faster checkouts, improved hygiene, and simplified cash management.
- It’s easy to implement contactless payments if you are working with a payment provider who offers the service.
What is Touch to Pay?
Touch to pay (also called tap to pay or touchpay) payment services allow you to make a payment simply by tapping your card, wearable device, or smartphone on a contactless payment terminal. Of course, your smartphone or wearable device needs to be payment-enabled.
At a checkout kiosk, if you find the universal contactless symbol displayed, it indicates that the device accepts contactless payments.
Contactless technology isn’t just fast and convenient, but also provides a secure way to make payments. Whenever you tap your contactless card to pay, it generates a one-time code that provides security against fraud.
Due to its safety, security, and ease of use, touch to pay is used by many customers at fast-food restaurants, grocery stores, gas stations, pharmacies, and even hotel lobby kiosks.
How do Contactless Payments Work?
So what’s the science behind touchless payments? There are two technologies that make contactless payments possible — Near Field Communication (NFC) and Radio-frequency identification (RFID).
NFC technology is a set of protocols that enables the communication between two devices in close physical proximity of up to 4 cm. This is very similar to (but not the same as) Bluetooth or AirDrop.
NFC mobile payments leverage apps like Google Pay, Apple Pay, and Samsung Pay on NFC-enabled devices like iPhones (or Android phones) to help people make payments when they’re close to a contactless terminal.
RFID, on the other hand, uses electromagnetic fields to identify and track tags attached to objects. The embedded RFID chip on a customer’s card is recognized by a contactless POS terminal. Tapping the card or holding it close to the terminal enables them to make a payment.
Note that touch to pay is only possible when a card/phone/wearable device is within inches of the contactless symbol at the checkout terminal (unlike mobile wallets that use cellular data or Wi-Fi for payments). Hence, touch to pay has a lower likelihood of intrusion as compared to payment apps operating on a wider and more vulnerable network.
What are Contactless Cards and How Do You Use Them?
If a Mastercard, American Express, Discover, or Visa card features the wave-like contactless symbol, it indicates that it is enabled for contactless payments. Contactless credit/debit cards, as discussed above, use RFID technology to payments processing.
Unlike good old magstripe or EMV chip cards, these require minimal contact with a point-of-sale system. Payment with a contactless card doesn’t require the cardholder to enter any PIN, passcode, OTP, or any other payment information.
Here is the simple three-step process of making a payment using a contactless card:
- Look for the contactless indicator at the checkout terminal. If it’s displayed, the POS terminal is touch to pay enabled.
- After billing, the contactless card must be brought close to the demarcated space on the terminal.
- The payment is made with a simple tap on the terminal. The payment is also processed instantly.
How to Make Touch-Free Payments with a Smartphone
Despite their user-friendly features, many retailers still don’t have the capabilities to accept contactless cards. However, most retailers do accept NFC mobile payments these days.
To enable NFC payments, customers simply need to add their debit, credit, gift, or other eligible payment cards to Google Pay or Apple Pay (iOs only) on their smartphones. The cards are tokenized for added security, so each card will have a different number in the app than the actual card number.
This converts the smartphone into a “touch to pay” device that allows customers to make payments without having to use contactless cards. All they need to do is to bring their phones within inches of the contactless symbol at the payment terminal until they hear a beep or see a checkmark on their screen.
Key Benefits of Touch to Pay for Retailers
Touch to pay is one of those trends that garnered immense popularity during the pandemic but is here to stay because of the many benefits it offers. If you’re wondering whether or not to implement touch to pay in your small business, we’ve got you covered.
Besides being secure and social-distancing approved, here’s why contactless payments can be a great addition to your checkout process.
1. Speeds Up Checkout
We can’t stress enough how quick and convenient touch to pay is. Contactless payments involve no verification hassles like entering a PIN, OTP, or passcode, so customers can breeze through the checkout process.
All they need to do is to tap their card or phone at the counter and walk out with their merchandise. You’ll appreciate the cumulative difference those precious few seconds can make, especially during peak business hours.
Additionally, the faster checkout process not only enhances customer satisfaction but also reduces queue times, allowing more customers to be served in a shorter period. This can lead to increased sales volume and improved overall efficiency in your business operations. By minimizing the time spent at the checkout counter, you can also free up your staff to focus on other important tasks, such as assisting customers, restocking shelves, or maintaining store cleanliness. This streamlined experience can contribute to a more positive shopping environment, encouraging repeat visits and fostering customer loyalty.
2. Simplifies Cash Management
Contactless payments eliminate the hassle of counting cash, stowing it safely, and returning the change. Your customers will be thrilled by the convenience and so will your staff.
By reducing the reliance on cash transactions, you can streamline your cash management processes. This minimizes the risk of human error in handling money, decreases the chances of theft or loss, and reduces the time spent on end-of-day cash reconciliation. Additionally, it simplifies record-keeping and accounting tasks, making it easier to track sales and manage finances. This efficiency not only benefits your staff but also enhances the overall security and accuracy of your business operations. With less time and effort required for cash management, your team can focus on providing better customer service and optimizing other aspects of the business.
3. No Extra Staff Requirements During Peak Hours
Businesses during rush hours, weekends, or holidays need to hire extra staff to process payments at the counter. With touch to pay, this can be reduced significantly. Customers can simply approach a battery of contactless terminals and get their payments processed with ease.
This not only reduces labor costs but also ensures that existing staff can focus on other critical tasks, such as assisting customers, maintaining store organization, and restocking inventory.
4. No Processing Fees Involved
Contactless payments don’t involve any additional processing convenience fees or hidden charges, even when paying through a smartphone. The only charges incurred are the processing fee of the debit or credit card loaded on the phone. This makes the payment solution highly attractive in terms of its operational costs.
This reduction in overhead costs can enhance profitability and provide more flexibility in pricing strategies or promotional offers. Additionally, the savings accrued from lower processing fees can be reinvested into other areas of the business, such as improving customer service, expanding inventory, or upgrading technology and infrastructure. The financial benefits of reduced processing fees make contactless payments an attractive option for businesses of all sizes, enabling them to operate more efficiently and effectively in a competitive market.
Future Trends in Touch Payments
As the landscape of touch payments continues to evolve, staying informed about emerging technologies and innovations is crucial for businesses looking to stay competitive and meet customer expectations. Here are some key trends to watch:
- The integration of biometric authentication, such as fingerprint and facial recognition, is becoming more prevalent. This adds an extra layer of security and convenience, ensuring that transactions are both safe and seamless.
- Beyond smartphones and cards, wearable devices like smartwatches and fitness trackers are increasingly being equipped with payment capabilities. These devices offer even more convenience for on-the-go payments, allowing customers to make transactions without needing to carry a wallet or phone.
- As voice recognition technology improves, voice-activated payments are emerging as a convenient option. This technology allows users to authorize payments through voice commands, integrating with virtual assistants like Amazon’s Alexa or Google Assistant.
To stay ahead in the evolving payment landscape, businesses should keep up with the latest trends and innovations in touch payments while choosing to work with payment systems that are adaptable and can integrate with future advancements.
How to Implement Touch to Pay in Your Business
With Stax’s contactless payment solutions, implementing touch to pay in your small business can be a breeze.
Stax offers an all-in-one suite of tools for retailers to accept virtual and touchless payments without having to buy multiple solutions or do any configuration themselves. This allows small business owners to offer a touch-free experience to their customers immediately.
Stax’s contactless payment solution includes:
- Touch-free countertop/mobile terminals to accept NFC payments easily
- A two-way text platform to communicate and accept payments from customers
- A virtual portal for securely accepting payments over the phone
- A one-click online shopping cart that allows you to accept online orders instantly without having to buy a domain or do any coding
- Easy invoicing via email and text message
With our tokenization and state-of-the-art cloud architecture, you can be sure that Stax will always keep your customer information protected and secure payment. Plus, our solutions have built-in protection to ensure that your customers don’t end up being accidentally charged more than once when they touch to pay.
Contact us today to learn more about Stax’s contactless payment solutions and how you can start accepting touch-free payments immediately.
FAQs about Contactless Payments
Q: What does Touch to Pay mean?
Touch to pay (also referred to as tap to pay) is a technology that enables making a payment simply by tapping your card, smartphone, or wearable device on a contactless payment terminal. This innovative method gained traction due to its convenience, speed, and enhanced security against fraud.
Q: How do contactless payments work?
Contactless payments operate via two main technologies – Near Field Communication (NFC) and Radio-frequency Identification (RFID). NFC allows two devices to communicate when in close proximity, while RFID uses electromagnetic fields to identify and track tags attached to objects. These technologies enable a smooth and fast payment process when the device is brought close to a contactless payment terminal.
Q: How can I use a contactless card for touch to pay?
If you possess a Mastercard, American Express, or Visa card featuring the wave-like contactless symbol, it means the card is enabled for contactless payments. To make a payment, locate the contactless indicator at the checkout terminal and bring your card close to the designated space on the terminal. A simple tap completes the payment, which is also processed instantly.
Q: Can I make touch-free payments with a smartphone?
Yes, you can convert your smartphone into a “touch to pay” device by adding your debit, credit, gift, or other eligible payment cards to Google Pay, Apple Pay, or similar apps on your smartphone. You can make payments without the need for a contactless card by bringing your phone within inches of the contactless symbol at the payment terminal.
Q: What are the benefits of the touch-to-pay trend for retailers?
Touch-to-pay significantly speeds up the checkout process, simplifies cash management, doesn’t require extra staff during peak hours, and involves no additional processing fees. This makes it a cost-effective and efficient solution during high-traffic periods, contributing to better customer satisfaction.
Q: How can I implement touch-to-pay in my business?
Implementing touch-to-pay in your business can be easy with contactless payment solutions, like Stax’s suite of tools. They offer touch-free terminals for NFC payment acceptance, a two-way text platform for customer communication, a virtual portal for secure over-the-phone payments, and an online shopping cart for instant orders, among other features.
Q: Are touch-to-pay methods safe?
Yes, touch-to-pay methods are considered safe as they use tokenization for added security, and each transaction generates a one-time code, providing protection against fraud. The transaction is only possible when the device is within inches of the contactless symbol, thus reducing the possibility of intrusion.
Q: Will touch to pay charge any additional fees?
Typically, touch-to-pay does not charge additional or hidden fees, making it an attractive payment solution. However, standard processing fees of the loaded debit or credit card may still apply.
