Contactless Payments

Contactless payments are a fast, more secure, and hygienic way to make purchases with a debit or credit card, or a mobile wallet such as Apple Pay® and Google Pay™. Read on to learn why it’s becoming an increasingly popular and advantageous payment method for you as well as your customers.

In this guide:

• The basics: what it is and how it works
• A brief history of contactless payments
• Why you should accept contactless payment
• Safety and hygiene considerations

What’s contactless payment and how does it work?

Contactless payment systems allow consumers to purchase products or services using a debit card, credit card, or mobile wallet without physically inserting or swiping a card into a point-of-sale device, handing a card to staff, signing their names, or entering PINs. Also called “tap-to-pay,” or “tap-and-go,” most contactless POS devices use either near-field communication (NFC) technologies to enable establish a connection with each customer’s card or mobile device.

A brief history of contactless payment systems

Although COVID-19 has helped bring contactless payments into the mainstream, the technology has been around for decades. For example, South Korean commuters could wirelessly pay for bus fare as early as 1995. In 1997, Mobil introduced a similar concept – enabling motorists to refill and pay at its gas stations.*

Yet even before touchless commerce technology existed, many retailers offered some form of “contactless pickup” in which customers park outside a store while employees load previously purchased items. Grocery stores often use this contactless pickup option – especially when servicing older or disabled customers.

Why every business should accept contactless payment

Merchants who accept contactless payments can realize the following benefits:

• Faster transactions Customers do not need to enter a PIN or provide a signature when making a payment at a contactless POS device. This allows merchants who accept contactless payment to process more transactions faster and reduce customer wait times.
• Greater customer satisfaction More convenient and faster transactions lead to more satisfied customers, who in turn are more likely to return and use their cards more frequently.
• Improved operational efficiency Speedier transactions reduce the number of cashiers needed while increasing the volume of transactions per cashier.

Consumers also benefit from contactless payment systems:

• Speedy, convenient payments No need to swipe or insert cards, enter PINs, or sign.
• Great alternative to cash and cards with a mobile wallet No more need to carry these items to make purchases.

Contactless payment systems are more hygienic

In addition to being faster and more convenient, contactless technology is the most hygienic of all in-person payment options because it doesn’t require any direct contact at the point of sale. There is no need to pass cards between consumers and merchants, type PINs into keypads, or use styluses handled by multiple consumers.

How to make a contactless payment

The contactless payment symbol on POS terminals indicates that the merchant accepts contactless payments. The wave-like symbol resembles the Wi-Fi icon, except it’s positioned horizontally instead of vertically. Here’s how to make contactless payments using either a card or a mobile device.

Contactless payments using a card (Tap-to-pay)

Credit or debit cards enabled for contactless payment display the contactless payment symbol on the face of the card.

• When the contactless POS device signals the payment prompt, your customer should hold the card one to two inches over the contactless symbol on the terminal.
• The system will then accept the contactless payment details and approve or reject the transaction.
• If the payment is approved, the contactless POS reader will play an audible tone.
• If payment is declined, the system will indicate that the transaction is “Not approved.” The customer can choose an alternative form of payment, such as using a different card or paying with cash.

Contactless payments using a mobile device

To enable contactless payments on their smartphones, smartwatches, fitness trackers, or other mobile devices, consumers first have to link their credit cards to a payment app, also called a mobile wallet.

• At the point of purchase, the customer holds the mobile device over the contactless POS reader near the contactless symbol. Depending on the mobile wallet being used, some consumers with a mobile phone will need to authenticate themselves with the phone’s fingerprint or face sensor; those using a smartwatch or fitness band typically don’t need to do this.
• The contactless payment system reads the payment details and either accepts or declines the transaction.
• If the payment is approved, the contactless POS device will display a checkmark and/or play an audible tone.
• If payment is declined, the contactless POS reader will indicate that the transaction is “Not approved.” The customer can choose an alternative form of payment, such as using a different card or paying with cash.

Clover accepts all major types of payments

Although some contactless payment companies lock you into their technology, Clover POS systems accept all of the most popular types of traditional and contactless payments.

Clover devices accept numerous methods of payment, including:

• Cash
• Checks
• Credit cards
• Debit cards
• Prepaid cards
• Gift cards
• EBT cards
• Custom tenders
• Alipay®

Credit and debit cards are the most popular payment methods. Many cards are already contactless-enabled and many more are being issued with contactless capabilities so that they can be simply waved over a Clover device for payment. In addition, almost all cards can be added to a mobile wallet, including:

• Apple Pay®
• Google Pay™
• Samsung Pay®

The Clover name and logo are registered trademarks of Clover Network, Inc.

Alipay® is a registered trademark of Alibaba Group Holding Limited in the U.S. and other countries. Apple Pay® is a registered trademark of Apple, Inc. in the U.S. and other countries. Google Pay™ is a registered trademark of Google LLC. in the U.S. or other countries. Samsung Pay® is a registered trademark of Samsung Electronics Co., Ltd. In the U.S. and other countries.

* “Contactless Payment,” Investopedia, 10 October 2020

Editorial Team

Guides, Mobile, Payments & processing

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