Common Questions About & Why Your Business Should Be Accepting Contactless Payments
By Jaredd Galloway, ETA CPP
Lately, there has been some headlines and articles surfacing about contactless payments. Often referred to as tap & pay or mobile phone payments, contactless or Near Field Communication technology has been available for a number of years. The most notable being the “SpeedPass” contactless payment service offered at Mobil gas stations as early as 1997. So why is there suddenly so much interest in developing and using contactless payments almost 20 years later? Here is a quick look at what contactless payments really are and a few reasons why the companies, payment processors and major banks may be trying to get you to use or accept contactless payments.
Apple Pay, Android Pay, Samsung Pay, Google Wallet & now Microsoft – What’s the difference?
From a payments perspective, literally nothing. These are all name brand mobile wallets. They all require you to setup an account and add a credit or debit card to act as payment. The only major difference is the availability based on the type of manufacture of the mobile device. There is a great chart on the CNN Money website here.
Without a card being swiped, is contactless really safe?
Absolutely. In fact, contactless is one of the most secure ways to process a transaction. The main reason is tokenization. When you use contactless payments, you are actually transmitting a random surrogate value known as a token. No actual card information is ever being transmitted. Additionally, many contactless hardware devices are also performing encryption. This means the tokenized data is also being encrypted when being sent off for authorization. This makes attempts to steal or capture this data pointless as the information and data contains no credit card numbers making it useless to criminals.
Do merchants pay more to process contactless payments?
The rates a merchant pays with a contactless payment will be the same. Whether the card used for the specific payment is processed by swiping the physical card or through a contactless device, the rate for that specific transaction would be the same on that card.
Does accepting contactless payments require special equipment or can a merchant use their existing device?
Most existing payment processing devices are not capable of accepting contactless payments. Merchants must upgrade their equipment to devices capable of receiving the tokenization. The Clover Mini is a great solution for merchants as the forward facing display shows the universal contactless payment logo when requesting payment from a customer. For more information on the Clover Mini POS, visit this website: Clover Mini
While contactless payment has been slow to take hold in the U.S., it has been widely accepted and used frequently in the United Kingdom, Australia & Canada¹. As more merchants, banks & consumers offer the systems necessary to process contactless payments, it can easily be seen as the payment processing method of the future. After all, it is fast, convenient and more secure than traditional methods of processing card payments.
About the Author:
Jaredd Galloway is an Electronic Transaction Association Certified Payments Professional overseeing and providing merchant accounts for tens of thousands of small business owners since 2002.
¹Webster, K. (2016, March 21). UK’s Lessons For US Mobile Payments Adoption. Retrieved from PYMNTS.com: http://www.pymnts.com/nfc/2016/uk-lessons-for-us-mobile-payments-adoption/
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