You’ve most likely seen these icons at hundreds of major restaurants, grocery stores and retailers including ExxonMobil gas stations, McDonald’s, Macy’s, Panera Bread and Whole Foods, so what do these icons mean and should your business be jumping on board?
In short, these icons are used by merchants around the globe to indicate they have the NFC-compatible (near field communication) POS systems to accept contactless payments including Apple Pay, Google Wallet, Visa payWave, MasterCard PayPass and any smart chip card with the contactless icon.
With financial institutions seeking more secure payment options, consumers embracing new payment technologies and retailers taking advantage of every possible way to attract more business, contactless payment options are emerging as the answer. The US has been years behind many European countries when it comes to the adoption of convenient, innovative and more secure payment methods and if recent data (Sept 1, 2015) from the UK is any indication of the future of US merchant services trends, the future is contactless:
Data from the UK Cards Association is showing strong adoption of contactless payments across the UK. According to the association, £2.5 billion in contactless card transactions took place during the first half of 2015. The figure more than doubles the £2.32 billion total for all of 2014. (read more)
What is a Contactless Payment / NFC Technology?
Contactless payments occur when a retailer accepts payment without a credit card or debit card being swiped or dipped and without cash or check changing hands. This happens when a device, usually a smartphone, credit card, smart card or key fob are waved over the retailers point of sale (POS) terminal. The chip inside the device uses radio-frequency identification (RFID), or near field communication (NFC), to authorize payment and generate a secure authentication code.
There can be some confusion between EMV smart chip cards and NFC contactless payment features. Some EMV smart chip cards contain the NFC technology that enables contactless payment, however they refer to uniquely different features. Be careful not to assume that EMV compliant terminals contain NFC technology. For more information about the EMV/ NFC distinction read our past post, “Does Your Business Need EMV (Smart Chip) Terminals?”
Benefits of Accepting Apple Pay, Google Wallet and other NFC Transactions:
So as a local Cleveland area retailer, or merchant, what’s the benefit of your store, bar, restaurant, kiosk or shop accepting these NFC transactions like Google Wallet, Apple Pay, Visa payWave and MasterCard PayPass?
1. Contactless Payments Are Faster
The NFC technology used in Apple Pay, Google Wallet, payWave, PayPass and other contactless payment transactions take mere seconds. Accepting contactless payments at your POS (point of sale) terminal is not only convenient for your customers by eliminating the need for going through their purse or wallet AND convenient for your clerk without needing to swipe, dip or count change – it allows you to move the lines faster and process more transactions per hour. (see the Apple Pay info-graphic below).
Assuming your line is never-ending, this is how many sales you can process each hour when accepting NFC, or contactless, payment technology.
2. Customers Spend More Per Transaction
Multiple studies in the UK and US have concluded that when consumers have a contactless card, spending on that card increases. According to MasterCard Advisors study on PayPass adoption, consumer spending increased by almost 30% over the first 12 months, which equated to consumers in the highest spend segment (1,500 + each month) spending $600 more each month once introduced to contactless payments (see MasterCard info-graphic below).
Research shows consumers using contactless payments spent 30% more.
3. More Secure Than Cash, Check and Swiping
When your NFC enabled POS terminal takes a contactless payment, whether it’s on a key fob, a smart phone or a smart chip card, a unique transaction code is generated to authorize the payment. Just like the EMV, or smart chip, payments, if a thief were to access payment information they would only get the unique transaction authorization codes which would be useless for making additional purchases. And of course counterfeiting a smartphone or NFC contactless credit card is virtually impossible, unlike the counterfeiting of magnetic stripe credit and debit cards.
How Will Contactless Payments Benefit Your Business?
Interested in learning more about whether your business would benefit from offering NFC-compatible POS systems to your customer base? At Renaissance Solutions Group, a Cleveland merchant services provider, we maintain long-term relationships with all our clients and get to know their business before making any recommendations. With no contracts and no equipment costs, we make it easy for Cleveland area retailers to choose the payment processing options that help to grow their business. Contact Renaissance Solutions Group