Contactless payments make the checkout process faster and easier for shoppers. Some small business owners, including yourself, are sceptical about the switch. You may not fully trust or understand this new technology. But there are resources available for you. Find out more about how contactless payments work and get tips on making the switch yourself.
What is contactless payments?
Contactless Payment uses tap-and-go technology to replace physical bills and card swipes. As opposed to standard debit or credit cards, proximity-based sensors automatically read the card information as long as contactless is enabled.
Small business payment options
These are the most popular payment methods accepted by small businesses. These methods can be used to purchase items for yourself.
- What you think cash payments. Cash payments are when customers pay for goods and services with bills or coins.
- Check payments. The check is a signed document that authorizes your bank to transfer funds from your customer’s account into yours. Most often, they’re used for large transactions.
- Card payments. In the United States, credit and debit cards are most popular due to their convenience. Cards are a faster way to deposit funds into your business’s account than going to the bank. This can, in turn improve your Cash Flow Management.
- Payments online. Electronic fund transfers are made through payment gateways. Website-based payments are made through debit and credit cards and eChecks for both online and brick and mortar businesses.
- Mobile payment. Mobile payment is made via smartphone apps. Examples include Near-field Communication (NFC), digital wallets, Apple Pay and Google Pay.
What is contactless payment?
Knowing how contactless payments work can help you decide if you want to switch. Contactless payment generally involves five steps, as explained below.
Step 1: Customer is asked to pay
The screen will ask the customer to choose their preferred method of payment after you have rung up the products. Selecting the contactless symbol (4 curved lines expanding) will allow the customer to choose the payment method they prefer.
Step 2: The card is held over the reader by the customer
Your customer will be asked to place their card on the contactless symbol. They’ll need to hold the card for only one or two seconds to allow the Terminal to read the card using Radio Frequency Identification technology.
Step 3: The terminal transmits the card information
When the card is held over the terminal, electromagnetic waves are used to transmit information from the card and communicate it with the bank account.
Step 4: Bank authorization
The bank of the customer will authorize or reject the transaction based on the amount of money in their account. Your business bank can transfer money from a customer’s account into your business if you have authorized the transaction.
Step 5: Confirmation of purchase
Payment terminals confirm that the transaction has been successful by emitting a sound, displaying a green light or displaying a checkmark. The customer can then put the card away, and take their receipt with them.
Contactless payments have many advantages
Businesses can benefit from several advantages of contactless payments.
Speed up
From the beginning of the transaction until the end, it takes only 15 seconds to use a contactless method of payment at the point-of-sale (POS). Transactions are typically faster when there are no physical bills or PINs. One employee can serve more customers in a short period of time.
Secure transactions
Contactless payments are among the most secure payment methods. The encryption and authentication protocols are designed to provide additional protection, protecting the financial information of customers.
Easy to use
NFC technology may make contactless payment terminals even more convenient for you and your clients. The NFC component allows the terminal to connect with cards and communicates with other payment methods such as electronic watches and rings. These devices allow customers to tap and go.
No extra cost
If you already own machines that support contactless payments, installing a new system is usually free. You’ll also pay the same rates for credit card processing when you use contactless payments as you do with standard card transactions.
Better customer experience
Customers will generally spend less time waiting in line if they can pay faster. Faster transactions can lead to fewer abandoned sales and a better experience for the customer.
Contactless payments have their disadvantages
It’s important to know the drawbacks of contactless technology before you adopt it.
Acceptance is not enough
Contactless payment offers a more convenient experience for customers, but some consumers aren’t on board yet. As long as you let your customers know that you accept alternative payment methods, it’s unlikely you will lose sales if you don’t implement contactless payments.
Security concerns
Contactless payments offer a high level of protection from digital threats. However, they do not prevent cards from being lost or stolen. Customers can deactivate cards remotely.
Contactless Payment Options: How to Implement Them
Here are a few tips on how to introduce a contactless system seamlessly.
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Install your equipment
First, you must determine if additional technology is required to enable contactless transitions. Small businesses often already have the equipment to read RFID and NFC, so it may be that you only need a couple of plug-in readers. If your business is not already equipped for contactless payment, you can research and buy a third-party solution. You can also work with your POS to come up with a solution that offers contactless options.
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Adapt your business system to the new system
After your terminals for contactless payments are installed, test them to make sure they work correctly. After that, teach your staff how to troubleshoot the terminal and accept payments.
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Tell your customers about the new payment option
Once you’ve got everything running smoothly and your staff is properly trained, tell customers about the new payment options. You should update your website so that visitors know you accept contactless payments. Also, make sure there are signs at the checkout for customers to see.
SmartBiz (r) allows you to take advantage of contactless payment.
Contactless payments can provide a better consumer experience. You can use the increased revenue to expand your business. SmartBiz can help with funding larger purchases. Enter your financial data into SmartBiz’s online application to determine if you are pre-qualified* for loans from the SBA or loans from traditional banks.
