Mobile and Contactless Payments
July 22, 2022
Mobile and contactless payments, what exactly are they, what’s the difference between them, and why would you as a merchant need to know more about them?
What are Mobile and Contactless Payments
Contactless payments are the new era of consumer transaction trends. It encompasses making a payment with a credit or debit card via a mobile wallet or the NFC chip embedded into a credit card.
A cardholder would need to upload their card information to their mobile wallet.
Which is linked to their smartphone with applications like:
Depending on the mobile device, different “e-wallets” will be better suited for different cardholders to make their mobile payment
Contactless transactions can also be made with a physical credit card, however, just like a mobile wallet, the card must also be equipped with near-field communication (NFC) capabilities and radio frequency identification (RFID) technology.
This technology emits radio waves from one equipped device to the other at a short-range distance.
This is done through the installation of a small chip inside the card. This is not the standard “dip chip” but rather one that you cannot physically see.
This capability would be recognizable with an icon that looks a lot like a Wi-Fi symbol
Why Your Business Needs Contactless Payment Options
In either option, the physical credit card or the smartphone app must be opened and hovered over or held near the card reader, about one to two inches.
However, keep in mind that both forms of payment via a mobile wallet or NFC-capable cards can only be successful as contactless if the card reader or terminal at a merchant location is also equipped with contactless technology including NFC and RFID capabilities.
Over the last two years, since the Covid-19 Pandemic erupted, contactless payments have skyrocketed to an all-time high.
Consumers are looking for the safest and most convenient way to go about their shopping.
Rather than swiping, dipping, or keying in their card information, offering contactless payment options to your consumers provides them with transactional ease, added convenience, and a shorter time in line to pay for their products and services.
Ease and Convenient Payment Options
With Contactless payments, your customers can frequent your store and leave their wallets at home!
Most consumers will not frequent a store that does not offer the option to pay with the cardholder’s “go-to” method.
How many times have you lost or forgotten your wallet somewhere? It happens to the best of us! But rarely do we leave home without our cell phones.
We typically know right away if we’ve left our phones on the counter, we turn around, grab our phones, and continue with our day.
Phones are the modern world’s communication device, with texting, calling, e-mail, search engines, clock, camera, and now most importantly wallet!
If your customer leaves their wallet at home, it is crucial to be able to offer more payment services including the option to pay using their smartphone.
This type of business practice of offering mobile payment solutions will set you apart from your competition.
If your competitor does not offer contactless payments or a variety of payment options, and you do, you will be by default creating repeat business and loyal customers.
Ease and convenience are number one for modern-day consumers and their active lifestyles.
Speed and Efficiency
Even though standard card transactions are much quicker than paying with cash or check, contactless payments are even more instantaneous!
A typical transaction with a chip card or a card with a magnetic stripe that is dipped or swiped takes around 3 seconds to transmit all the data and display the approved or declined response.
A contactless payment or “tap-to-pay” will take as little as one to two seconds! By the time the mobile device or NFC-enabled card is out of your consumer’s pocket and near the terminal, the response message is already displayed on the screen.
Rapid transaction times with payments processed in under 2 seconds will not only satisfy your customers at the register but will also appease the line behind them.
Long, slow-moving lines provide a customer the opportunity to re-think their purchase. It gives them ample time to debate if the price is right, if they genuinely need the item, or if their time is more valuable than waiting to make the purchase.
Customers forced to wait in these types of lines may end up putting things back or walk out of the store altogether. Ultimately, they may even find another merchant who has faster-moving lines for check out.
With contactless payments, you are ensuring your customers that their time is valuable, and you are also removing any downtime for your consumers to debate their purchases.
Less time at the register generates brief wait times in line and encourages customers to visit more frequently, offering an experience that will take less time out of their busy day to complete their purchases.
Hygiene Friendly Payment Solutions
Contactless payments say it all. Since the awareness of the spread of diseases has become the height of topic in today’s world, keeping a distance is the trending experience consumers are looking for regarding managing their health.
Because contactless payments are just that, contactless, there is no exchange between parties of handing the cashier your card, cash, or check.
No items are touched, and payments are made in the safest and most hygienic fashion.
Another huge benefit to contactless payments is the additional security measures in place versus those used in older cards with magnetic stripes.
With mobile wallets, full card numbers and personal information is never stored. Furthermore, with mobile payments and the newly embedded microchips in NFC-enabled credit cards, a one-time code is always created for each transaction.
The card verification code (CVV) and cardholder’s address and name are no longer transmitted as they used to be.
Because of the lack of personal information transmitted and stored, and the additional security measures in place with contactless payments, fraudulent activity does not pose as high of a threat as it once did with older card generations, and therefore as a merchant, you will also carry less liability.
Setting Up Your Business Be Set up with Contactless Payment Options
Mobile wallets or NFC-capable cards are fantastic, and they are becoming increasingly more popular as the years go by.
However, these types of payments can only be successful as contactless if the card reader or terminal at your business location is also equipped with NFC technology and RFID capabilities.
These types of terminals and devices may be purchased directly from your credit card processing company, if they offer all-inclusive services, as ECS does.
Your business can accept contactless payments through Point-of-Sale devices such as a physical terminal, mobile phone, or smart tablet.
Most card terminals today like Dejavoos, Clovers, and Verifones can communicate captured card information via a typical telephone line connection, cellular network connections through AT&T, Sprint, or Verizon, or with internet connections via ethernet and Wi-Fi.
Electronic Cash Systems (ECS) offers support for CDMA, GPRS, IP, or dial-up environments at all merchant locations. ECS is also pleased to provide these “made for purpose” terminals to assist in setting up your business for success.
Mobile Payment Trends
Contactless payments will continue to escalate and dominate the payment industry in the years to come. The continued new advances in contactless payments and payment options for merchants will ultimately be driven by the increasingly tech-savvy younger generations, raised on electronics.
These generations may never have to touch cash again. Soon enough, these younger groups may not even know what a dollar bill is. We are quickly approaching a cashless society, whose only means of payment are by way of digital currency.
Card networks such as Visa and Mastercard have both reported after 2020 that over half of cardholders are selecting to use contactless payment methods over traditional transaction methods as their preferred method for making purchases. Moreover, Discover and American Express both now only issue replacement cards with contactless capabilities.
All card issuers will most likely only be sending these types of cards in the future.
The reason so many cardholders can increase the frequency in which they choose to use their contactless payment methods is the recent increase in the availability of merchants who are now able to accept these types of payments.
Today, over half of the merchants in our economy who accept credit card transactions, also offer contactless options. If your business does not yet have this highly sought-after capability, it is urgently encouraged.
At Electronic Cash Systems (ECS), we understand that older equipment may not be compatible with this new technology.
We are committed to providing quality merchant services and maintaining ongoing relationships and an equitable partnership with our clients, employees, and the business community at large. We aim to be a “One Stop Shop” for all payment and product needs.
As a “one-stop-shop” payment processor, we want to make it as convenient as possible for our merchants to be able to offer updated payment solutions to their consumers.
We offer free replacement terminals to any of our merchants looking to make the switch! It is now easier than ever to make the switch and soar above your competitors in your industry.
What Is The Difference Between Mobile Wallet and Digital Wallet?
Mobile wallet, digital wallet, Apple Pay, Google Pay, etc., seem to be used almost interchangeably, however, there is a huge difference between these terms.
A mobile wallet is an app on a smartphone like Apple Pay, or Google Pay that securely stores credit card information to then be used to scan in person at a merchant location.
A digital wallet can also be called an e-wallet.
This is a virtual program like PayPal or Venmo that offers the capability to send funds to and from a person’s bank account directly between two individuals, with a click of a button.
A customer typically cannot use a digital wallet to make store payments for goods or services at a merchant store location, but rather, they must use a mobile payment system on a POS device or terminal to scan their mobile wallet or NFC-enabled card.
Mobile and Contactless payments Conclusion
All in all, we now understand how important it is to stay up to date with the latest in technology. Not only will this help keep your business in the loop with what’s trending in today’s world, but it will also gain satisfaction from your consumers.
Gaining this type of confidence from cardholders will put you at the top of the chain in your industry and can rank you higher than your competition. To gain access to all the benefits contactless payments have to offer, you will need to find yourself a credit card processor that you can entrust to your business.
One that offers a wide variety of payment solutions for your business. At Electronic Cash Systems we aim to be the “Best in Class”, and with that, our merchants will inherently rise to the same standard.
ECS Payments is committed to providing quality merchant services.
Our aim is to be a “One Stop Shop” for all payment and product needs.