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What is a Contactless Payment? More Than You Think

What is a Contactless Payment? More Than You Think
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What is a Contactless Payment and Why is it Trending?

Pre-COVID-19, few people thought much about how they paid for goods and services. The choices were binary: “cash or card,” “debit or credit,” “insert or tap.” But once the coronavirus pandemic hit, everyone avoided touching anything that could spread germs, and how we pay suddenly shifted.

In early March, Forbes published an article about the WHO advising the “use of contactless payments to reduce the risk of transmission" of COVID-19. Almost immediately, cash was deemed unsanitary and the term “contactless” became a buzzword.

But what exactly is a contactless payment?

You may be surprised to find true contactless payments go beyond the near-field communication (NFC) technology found in new EMV-chip cards and smartphones or wearables. A true contactless payment involves more than just the payment method. Before we dive into the specifics, let’s first review why the “contactless” idea has become so popular in such a short amount of time.

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Changing Perceptions of Contactless Payments in the Wake of COVID-19

The Futurist Group conducted a two-wave study of 3,187 U.S. consumers and their view of contactless payments. The first wave was done in March 2019, and the second on March 3, 2020, just as the coronavirus began spreading. About 38% of consumers now see contactless payments as a basic need or feature, up from 30% a year ago. The percentage of consumers that say they don’t need contactless payments fell from 41% in March 2019 to 33% this year. And it’s a good bet that number has continued to fall since then.

As businesses start to reopen, state and county governments are publishing strict mandates and recommended guidelines that ensure safe and healthy business interactions. Many of the orders strongly encourage business owners to accept contactless payments. Anecdotally, consumers are avoiding places that don’t accept contactless cards or digital wallets. And since contactless payments use advanced security technology that can’t easily be hacked, businesses are protected from certain types of fraud. It’s clear that contactless payments have the potential to increase physical safety by reducing exposure to germs as well as digital safety by reducing fraud risk.

What is a Contactless Payment? Beyond The Payment Method

Having a payment terminal that can process contactless cards and wallets (e.g. Apple Pay) using NFC technology is important. Paying with the wave of a contactless card, phone or wearable device eliminates the need to touch cards. However, that is just one portion of a payment. There are actually three primary exposure interactions that exist during an in-person payment transaction that could be contactless:

Exposure Interaction Ways Germs are Spread How to Reduce Exposure
Customer-to-Staff When terminals, cards, pens, and
receipts are passed between employees and patrons.
- Customer-facing terminal
- Contactless payments
- Disable paper signatures and receipts
Device-to-Customer When patrons need to touch a terminal’s
keypad and/or screen during the checkout process.
- Contactless payments
- Disable digital signatures and receipts
- Consistently disinfecting devices
Customer-to-Customer When customers don’t wear a mask, maintain social distancing,
or sanitize their hands after touching any surface
- Signs promoting acceptance of contactless payments
- Hand sanitizer and/or isopropyl cleaning wipes at checkout

Depending on the type of device and how the software is configured—coupled with the fact that not everybody will pay via contactless—you may not be able to completely eliminate touchpoints. You don’t want to reopen your business only to lose patrons who feel unsafe, so assess the various touch points that may exist in your checkout process and identify ways to remove them.

Before you jump on any offer to upgrade to a contactless payment terminal, ask the questions below. If the answer is yes, then it’s not a truly contactless solution and you will still be exposing staff and customers to risk of transmission.

  1. Is it clerk-facing?
  2. Do customers have to select “debit” or “credit”?
  3. Do customers have to push a button or the screen to approve an amount?
  4. Do customers have to sign the screen or a paper receipt?
  5. Does it automatically print a customer receipt?

Now that the term “contactless” has been unpacked, what is your next step to make sure your checkout process is safe, secure and germ-free?

Learn more about contactless payments beyond the payment method.


Does your current terminal support true contactless payments? We’re curious to hear if businesses are able to eliminate all the points of interaction today. Leave a comment below!


About Author
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Casey Russell

Casey Russell is a risk analyst for PayJunction. He analyzes merchant statements to detect unethical billing and savings.

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