Offer Contactless Payments for Safer Faster Way to Pay
One of today’s hottest trends–contactless–is something we hear everywhere: contactless shopping, contactless delivery, contactless payments, and more. But customer experience has been the real driver of our contactless trend. Whether instore or online, the customer experience influences both immediate and future shopping behaviors.
Many external factors help drive trends that lead retailers to provide new customer experiences. Although hard to predict when they will occur, local, regional, or global crises impact buying behaviors, including panic-buying, over-buying, and emotional buying.
ArcherPoint’s Curbside Pickup Tribe Talk highlighted that retailers have provided curbside pickup options since the early 1920s. Similarly, contactless payments—the latest buzz phrase—has also been in use around the globe for years:
- The first reported contactless payment method occurred in the mid 1990s.
- In 2018, more than 40% of in-store Visa transactions outside of the US occurred with a tap to pay option.
- In early 2020, 31 million Americans used a Visa contactless payment, which is up 150% from March 2019.
And as the experience gets faster, more personalized, and safer, consumers will demand all retailers provide this payment option.
Contactless Payments are Safer and More Efficient
Like chip cards, contactless payments do not transmit the name, card number, or the three-digit security code (CVV). Instead of relying on a chip and one-time security code, tap-to-pay options use a unique, tokenized ID to mask the credit card number and related sensitive information. Only when you tap the card – or unlock your phone – and place either the card or phone within two inches of the payment device, the reader will initiate communications. From there, within less than 2 seconds, a short-range, wireless communication called NFC - near field communication – will be able to register the authorization for payment.
And to address concerns about lost cards or lost phones with mobile wallets activated, many financial providers give the ability to freeze, lock, or even wipe your account remotely.
A Personalized Customer Experience
As more consumers begin to transition to this type of standard payment method, financial providers are adding features to enhance the customer experience during the payment process. For example, some digital wallets are linking to loyalty programs and other monthly membership service.
Event venues report that fans are spending 20% more onsite when using RFID wristbands versus cash payments. This increase in spend is likely due to a desire from customers for a more seamless experience by eliminating counting cash, organizing receipts, and waiting for slow machines. Tap-to-pay options are also nearly impossible for hackers to crack, which eliminates the worry about theft.
Keep Your Goals in Mind as You Adapt to New Trends
Retailers should always carefully analyze the benefits and requirements of adding new services or offerings. For example, what do you want to accomplish with offering contactless payments? It’s important to evaluate your current technical capabilities and equipment. A few years ago, retailers had a massive push to EMV-enabled devices. Of those newly 12 million installed, three million are already contactless-capable. Reach out to your local support partner or internal IT team to see if your current system needs to be upgraded to utilize this option.
There might also be some limitations to consider, like processes that require additional interaction, such as verification of ID or pin. These could be actions the customer needs to complete on their device to finish the payment transaction, such as using the fingerprint reader, or maybe as simple as entering a pin on the credit card terminal.
And consider how your staff will be involved in receiving and processing this new payment method. Be sure to provide basic troubleshooting procedures, like restarting the hardware device, or have a list of commonly known errors to help finalize the transaction quickly.
Contactless payments are becoming an industry standard. Stay ahead of the competition and take payments the way your customers want to pay. To learn more, subscribe to our quarterly e-newsletter or talk to one of our sales consultants today.
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