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How contactless payments are beneficial for a business

How contactless payments are beneficial for a business

Both vendors and customers benefit from debit cards and credit cards in their day-to-day dealings with money. A card machine for business makes it easy for you to pay with a debit card or credit card at a merchant outlet. You only need to enter your PIN to confirm the transaction. Contactless cards dominate the market for card transactions today. They are the newest method of making payments without a PIN.

The contactless payment process involves moving a security token close to the point of sale (PoS) reader at a vendor to authorize monetary compensation for a purchase. Bank cards with chip-enabled technology and smartphone apps that act as digital wallets are popular security tokens for contactless payments. A contactless payment can also be called a touch-free payment, a tap-and-go payment, or a proximity payment. Frictionless checkout refers to a process in which goods or services are purchased through contactless payment.

The adoption of contactless payments has accelerated due to COVID-19 and consumers’ desire to avoid person-to-person contact when buying in-store. Contactless payment cards and authorized mobile devices contain RFID microchips, transponders, and antennas. It is necessary for the customer to be close to the reader of the vendor to make a purchase. It is not possible to process or authorize transactions through Apple Pay or Google Pay. They simply pass the tokenized credit card information onto the appropriate credit card network by tokenizing the payment card.

Every time a card or authorized device is used in a contactless payment, the microchip generates a new verification value. There are significant differences between this approach and magnetic stripe cards. The billing information for the customer is transmitted every time the card is swiped with a traditional magnetic card. It is possible for that information to be intercepted and misused by a third party, or even sold on the dark web. The only information that can be intercepted during a wireless transaction is the unique authentication code that identifies that particular transaction.

How secure is contactless payment?

The contactless payment system is known to be secure because billing and payment information is not shared directly between the customer and the vendor. Every purchase is tokenized with a one-time transaction number and all communication is encrypted. During an intercepted wireless transmission, an attacker will receive only the one-time code used to identify a particular transaction.

Every time a card or authorized device is used in a contactless transaction, the microchips generate new verification values as mentioned before. It is very difficult for thieves to clone a chip card and attempt to make purchases since the card generates a new code every time it is used. It is simply not possible to duplicate dynamic authentication technology in a way that will produce the same dynamic codes that are returned by a valid chip card. Additionally, smartphones will require users to authenticate their identity before initiating contactless payments – for example, by using Face ID.

Whenever you tap or wave your card near a contactless terminal, it transmits the required information as encrypted radio waves. Also, the radio waves that are emitted by contactless card machines are very short-range. To complete a transaction, the card must be placed close to the POS terminal by at least 4 centimetres.

KYC-compliant merchants are only allowed to use the POS terminals. As a result, if your card is misused, it can be identified by the fraudulent transaction and the POS terminal. If your contactless card is stolen or lost, you need to inform the card issuer as soon as possible. They will immediately block your lost card so they can’t take place in any further transactions.

Other Benefits of contactless payment

  1. Speed

The speed of contactless payments is twice that of normal cards, and they can be completed within 15 seconds. The simpler the process of processing and handling cash, the faster transactions will be completed, turnover will improve, and queues will be less likely to form.

  1. Effortless

It’s not just cards that can be used for contactless payments. In contactless readers, NFC technology can be used to interact with phones and connected accessories. With the launch of Apple Pay in 2014, users could use their phone to pay if they forgot their card or it was out of reach. After the Apple Watch was released, this concept was further developed. Payments can also be made directly from your wallet without removing your card, making the process even more convenient for the customer.

  1. Overall customer experience

Through faster, more secure, and effortless transactions, throughput can be increased, and abandoned sales reduced. A seamless payment process increases the average transaction value (ATV) when customers are not restricted by their cash amount. Most contactless transactions don’t require verification or a receipt unless the customer requests it, or the transaction is of higher value. In other words, this reduces the amount of time the customer must spend at the payment counter.

  1. Better operational efficiency

As a contactless payment machine reduce transaction lengths, queues are less likely to form, meaning less staff is needed behind tills, and they can be distributed on the shop floor, improving the customer experience and service inside the shop. Additionally, contactless payments assist in reducing the number of time employees must spend counting cash or operating card machines.

5.No extra cost

It costs businesses nothing to offer contactless payment as a card payment solution since there are no processing fees involved. Furthermore, certain providers will allow businesses to upgrade their card readers to contactless payment machines without charging much.

  1. For banks

Banks are not only enhancing their customers’ experience by offering contactless options, but they are also able to offer added-value services and therefore differentiate from their competition. As contactless smartcards become more upmarket, such as metal cards, they can also target wealthier and VIP clients.