Contactless Payment Could Become Commonplace Post-Pandemic
Coronavirus Stay-at-Home orders are easing across the country and Americans are slowly beginning to venture out into public spaces again. Retailers have had to make changes to policies and procedures to make sure they’re providing a safe retail environment for their customers. From Plexiglas dividers, to one-way traffic aisles, to the required use of a mask – retail stores must maintain these practices even as restrictions are lifted. Although it may seem like things are slowly getting back to normal, some changes to your retail shopping experience may never be the same.
In a recent survey, the Washington Post stated that more than half of Americans are making trips to the grocery store. However, 67 percent of Americans admit that they wouldn’t be uncomfortable shopping at a retail clothing store. 78 percent of Americans are still not comfortable with heading to a sit-down restaurant. These numbers show that Retail has a battle ahead of them.
Each sector of retail will have different ways in which they’ll need to handle operations to make conditions safe for their customers. One aspect that applies to all is payment method. Customers and Employees alike are concerned about handling money. Credit and Debit cards are a safer way to handle payment. Above cash or card, a better payment option could be contactless payment. Contactless payment has grown over the last few years, but it’s still an uncommon payment method for customers. However, with coronavirus still a concern, the current condition of the retail market could be exactly what contactless payment needed to be pushed into the mainstream.
As the name suggests, contactless payment allows a customer to pay for goods without the need for money or a credit/debit card. Simply by holding a device near a point-of-sale terminal such as a chip card, smartphone or wearable device, the terminal can read relevant payment data to conduct the sale.
Most POS terminals that are set up to handle these transactions use NFC (near-field communication) technology to process payment. NFC technology requires an initiator that generates a radio frequency field and a target that is powered by the RF field to store the data. So whether you’re using a contactless card or a mobile payment on a smart phone through Samsung, Google or Apple, the POS reader will create a small RF field which activates whatever device you are using for your payment for a one-time, encrypted transaction.
Major technology companies like Samsung, Apple and Google have been offering contactless payment on their mobile devices for years, but adoption of this method has been limited. However, as both consumers and businesses are adjusting to regulation put forth during the coronavirus pandemic, a recent report detailed that there has been a 27 percent increase in contactless payment at small businesses.
Although contactless payment is a fast and health-conscious way to pay during the current health crisis, there are some limitations to this payment method. One current limitation to contactless payments is its range. NFC technology requires the device you’re using as your payment method to be less than an inch away from the POS terminal to conduct the transaction. A potential solution to this range issue would be to implement Bluetooth as the technology used at POS terminals. Bluetooth is more commonly used across mobile and smart devices, and provides a much larger range to work with. Increased transaction speed and the ability to handle more transactions are more advantages of using Bluetooth.
Another limitation to contactless payment is security. For example, stolen chip cards or PIN cards can be used to conduct a transaction that looks legitimate. Credit providers are increasing spend limits for contactless payments, which makes stolen cards even more of a concern.
Despite the risks and limitations, contactless payment is still one of the safest ways to pay for goods during the coronavirus pandemic. So how do businesses who aren’t set up for it begin to implement contactless payment?
To begin, a retailer must acquire POS systems that have the capability to read smart cards, can initiate contact with mobile/smart devices, and can handle transaction data. You’ll also have to choose the right software and follow regulations. The Payment Card Industry Data Security Standard is a regulation that clearly identifies rules for handling financial data to ensure that customer information is not exposed. The devices that are used need to also be registered with payment providers for authorization to process customers’ financial data. This will allow them to track transactions in case there is fraud. Choosing the right hardware and software is critical. If the devices that businesses are using don’t meet the regulatory requirements, the business will incur the chargeback costs.
With the current health climate, contactless payment will rise in popularity out of necessity. It offers consumers peace-of-mind. Though it is being adopted for health reasons now, over time it could become common practice.
Story via BizTech Magazine
