Contactless Payment Systems
Contactless payments are thought to be the most important card payment innovation in the last decade. With investments by the card associations and early adoption on the part of major card issuers and top-branded merchants - contactless payments are already in the hands of millions of consumers and in the checkout lane of thousands of merchants.
In environments where speed and convenience are important, contactless payments can add demonstrable value. The RF-based contactless payment devices are easy to use; consumers like the increased speed and control of transactions and are increasingly using the devices instead of cash. |
|
In fact, the Tower Group predicted that, by 2009, the total market for contactless micro payments (those worth less than $5) in the United States will reach $11.5 billion, with almost $5 billion of that transacted via mobile phones.
Contactless Payments Replacing Cash
Cash and checks make up 58% of the $6 trillion dollars worth of consumer payments in the U.S. The Nilson Report estimates that within five years, cash and checks will represent less than 37% of transactions, with cards representing over 49%. Since late 2005 there has been an expansion of contactless payment technology beyond credit to signature debit (check cards). Contactless credit and debit cards are enabling consumers to pay more easily than with cash at movie theaters, fast food restaurants (QSR), casual dining establishments, convenience stores, gas stations, drug stores and grocery stores. Contactless is also ideal for other markets like unattended and self service payment systems such as ticket vending, multimedia kiosks and parking.
Contactless Payments are Fast and Convenient
Consumers no longer have to fumble with cash and change or worry about having enough cash for a purchase – they can place their contactless payment device in close proximity to a reader. In most cases, they don't even have to sign a receipt or enter a PIN.
Contactless studies show:
- Customers get through the line 53% faster with contactless than with magstripe transactions, and 63% faster than cash.
- Customers spent 25-33% more with contactless than with cash.
American Express, Discover Network, MasterCard and Visa in concert with their issuers, have implemented new programs and rules designed to encourage adoption of contactless payments. These programs are typically aimed at transactions below $25 and cash is the predominant form of payment. While there are differences by payment brand, features include:
- Consumer signature not required
- Customer receipt is only required upon cardholder request
- Merchant retains full chargeback protection for transactions that meet the program requirements.
Contactless Payments are Safe and Secure
Although based on chip-level RF technology, contactless payment technology is fundamentatly different from RFID and is built from the ground up on requirements for high security. Contactless payments devices are sophisticated smart chip technology with built–in intelligence and multiple safeguards specifically designed to protect against fraud. Built on the current payment infrastructure, contactless payments leverage layered security.
Consumer account information is stored securely on the chip and the cards themselves are tamper-resistant and extremely difficult to duplicate. A payment transaction initiated by the contactless smart card's built-in chip is be considered much more secure than one initiated with a magnetic stripe card.
Standards are important for the adoption of technology as they provide the ability to have multiple sources of products base on the same standard. The major international card associations (MasterCard, Visa, and American Express) offer RF-based contactless payment technology complying with the ISO 14443 standard. A Single Industry Standard (ISO 14443) RF Contactless smart card technology means that the same contactless payment device can be used to accept payment from American Express ExpressPay, Discover Network, MasterCard PayPass and Visa Contactless.
 |
Contactless Acceptance
Look for this common acceptance mark for contactless payments at the point of sale. |
Mobile Phone Payments
Mobile phones may become the payment choice of consumers who would rather tap a mobile phone against a contactless reader than dig around and search for a payment card. The industry is already moving to mobile phones to conduct contactless payments. Several pilots have been launched in the U.S. of Near Field Communication (NFC) technology to deliver contactless payment capabilities.
Merchant Contactless Payment Solution
Vantage Card Services offers contactless RF readers that can quickly and easily be installed with existing POS systems. In the future, POS terminal vendors are also expected to release new POS terminals with physically integrated contactless readers.
Vantage Recommends ViVOtech
ViVOtech is the market leader in contactless payment software, readers, cards, fobs and transaction management systems. These solutions allow consumers to make contactless payments with radio frequency-enabled credit cards, debit cards, key fobs, and NFC enabled mobile phones.
Merchants are able to plug a ViVOpay™ terminal into their existing point-of-sale (POS) systems in just minutes and enjoy the increase in average transaction amounts of consumers using payment cards instead of cash, while providing enhanced consumer experience and quicker check-out lines.
ViVOpay™ transforms merchant legacy devices. ViVOpay enables contactless payments without any hardware or software changes to existing devices at a minimum cost to accept payment from contactless credit and debit cards as well as from cell phones and PDAs.
 VivoPay Reader Brochure
The ViVOpay reader is available now and is currently being installed at restaurants and retailers.
Merchant Registration
For merchants using a contactless point of sale solution, registration is required in order to meet the compliance standards of Visa and MasterCard, as well as ensuring eligibility for applicable Interchange categories and chargeback protections.
Get Started
To take advantage of this innovative payment processing method, contact Vantage at 800-397-2380 for merchant rates, registration and complete implementation support. |
A+