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.

Contactless Payments Replacing Cash
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.

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.

Contactless Acceptance
Look for this common acceptance mark for contactless payments at the point of sale.