The Importance of Contactless Payment

Michelle Lawrence Picture

by Michelle Lawrence | Last Updated: Apr 16, 2020

I hardly carry cash with me anymore. My reason to ditch cash has never been affiliated to hygienic concerns, rather convenience. I’d much rather have the cashier scan my phone or swipe my card to pay for my coffee rather than anxiously thumb through my wallet in the drive-thru fearing I’m holding up the line. Because of COVID-19, we’re now rethinking how we exchange payment. Have you ever stopped to think about how many people have touched the PIN pad at your local grocery store? If you were like me, you probably held an “ignorance is bliss” mentality...until recent events completely changed everything. In fact, many stores have stopped accepting cash as a form of payment and consumers are wary of touching the pin pads. So what’s the solution? Will we ever casually exchange cash or enter our cards into chip readers without hesitation like we used to? With small businesses reporting an increase of 27 percent of contactless payment transactions, we may not want to. Contactless Payment isn’t New  Mobile wallets and contactless cards have been around for a while. Thanks to Near Field Communication (NFC), consumers have had the ability to tap their smartphones to the sales system since 2012. The reason why you’re hearing about contactless payment more now than ever is because of the increased number of stores (like Walmart and Publix) that have recently expanded contactless payment options for consumers due to the COVID-19 threat. The benefit to contactless payment is consumers don’t need to actually “tap” their phones, smartwatches, or contactless cards to a machine. NFC is able to receive the radio frequency by simply holding their payment close to the machine. The other advantage is that mobile wallets don’t just “carry” your credit card information, you can add your boarding passes, tickets, membership cards, and so much more. If your phone could do this and more, wouldn’t you think we would all be “tapping” to pay for our groceries? Think again. Why Weren’t We Tapping Before?  While Millenials and Gen Z are using mobile wallets more than other generations, less than 20 percent of millennials and Gen Z are using digital wallets. This took me by surprise, even though I am a millennial who up until last week, didn’t utilize Apple Pay. Consumers had previously been hesitant over things such as Apple Pay, Google Pay, and Samsung Pay, but in lieu of recent events, they are considering giving it a second chance. So why are some still hesitant to utilize this technology? Some believe that contactless payment isn’t as secure as traditional forms of payment. People tend to cling onto familiar habits during adverse times, so it’s no surprise that people are wanting to keep their credit cards close...but as the case for contactless payment becomes more apparent, maybe then consumers will put more faith behind it. The Case for Contactless Payment  Contactless payment is arguably more secure than paying with traditional credit cards. With a short range of encryption and code protection, stealing important information is more difficult with NFC-enabled payment as someone would need to be within 4 centimeters of a payment reader before the signal weakens. There’s also an added security measure when using Apple Pay, Google Pay, or Samsung Pay; the added verification step to enter your PIN number, fingerprint, or face authentication verifies that you are the actual person making the transaction. Now, you might be saying, “Well, that’s great but what if I lose my phone?” On some smartphones, you can actually track your phone to lock it or erase the contents of your phone. And if you’re still not sure about the security of contactless payment, some countries like the United Kingdom, have increased the spending limit in stores to $52 with contactless payment due to COVID-19. In the U.S., if an in-store transaction is above $100, you may be prompted to provide your signature in addition to authorizing the payment on your phone if you decide to tap rather than swipe. Safeguarding Your Health  Never in my life have I disinfected my credit card until this year. But in a recent study that proved credit cards actually carry more bacteria than cash, I was lunging for my disinfecting wipes before I could finish the article. People are now second-guessing whether they’re risking their health if they swipe their credit cards and use the pin pad to enter their pin number. Before this year, Walmart shoppers had to select a method of payment on the touchpad. Now with Walmart Pay, all you have to do is scan the QR code to activate Walmart Pay which eliminates shoppers’ contact with the touchpad. Even Burger King has made contactless payment a priority for its customers. Not only does contactless payment minimize your contact with shared surfaces, but it also speeds up the checkout process. If you’re still conducting your grocery shopping the old school way by actually entering a store, then you know the importance of an efficient checkout process. Stores that have enabled contactless payment have decreased the time consumers stand in the checkout lanes, which in return helps protect you and your family. Transitioning to contactless payments has increased in importance over the past month. With some stores banning the use of cash, consumers will need to look for other payment options that limit the number of interactions between individuals. Contactless payment is a great example of how using your mobile platform can not only make your life easier but also safer. If you’re interested in hearing other mobile marketing strategies, be sure to listen to this Mobile Matters podcast episode where we discuss mobile wallets with the Head of Product Marketing at G2, Yoni Solomon.

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