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Contactless card payments, or NFC payments as they are more commonly known, have been around for a number of years now. This technology allows customers to make transactions without the need for physical contact with any POS terminal such as credit and debit cards in order to complete payment.
Contactless payments are a new way to pay for goods and services. This article will teach you everything you need to know about contactless payments.
Contactless payments, such as Apple Pay and Google Pay e-wallets in smartphones and smartwatches, or tap-to-pay credit and debit cards, employ near-field communication (NFC) technology to communicate data between readers and payment devices. To accomplish these contactless payments, NFC devices must be close together (usually less than 2 inches apart).
Because NFC payments are contactless, encrypted, and extremely secure, they are frequently utilized. They may also assist speed up the checkout process. A dedicated card reader is required to accept certain payment forms. Most merchant accounts, however, provide NFC readers owing to the popularity of contactless payments and improved adoption rates as a result of the COVID-19 epidemic.
What Are NFC Payments and How Do They Work?
The NFC chips exchange encrypted data to complete a payment when the payment and reader devices are near together and active. The approach offers a lightning-fast checkout procedure that is also one of the most secure payment ways. As a result, NFC-based payments, such as Apple Pay and Google Pay, are quickly becoming the preferred form of consumer payment.
NFC payment scanners, such as this one from Square, enable safe wireless communication between mobile devices and registers.
Radio waves are employed in the wireless connection between the two devices, similar to radio-frequency identification (RFID) labels used in retail, warehouse, and other wireless tracking applications. NFC chips employ a unique RFID radio frequency (13.56MHz) that only works when the chips are in close proximity.
E-wallets only connect with NFC readers when the e-wallet user opens the software on their smartphone, chooses the payment card to be used, and completes the payment operation, for increased security.
The payment screen on iPhones is unlocked via a secure fingerprint or face recognition.
Another benefit of NFC payment scanners is that they only connect to one NFC payment device at a time. This eliminates the possibility of a close client unintentionally paying for another’s transaction. That is just not possible due to technological limitations.
Shoppers may save numerous credit and debit cards on their mobile devices, in addition to the security features mentioned above. This eliminates the need for customers to carry cards in their wallets and handbags. Consumer use of NFC payments is increasing as a result of this ease, and stores that take a variety of NFC payments can easily cater to this rising clientele.
Accepting NFC Payments: A Step-by-Step Guide
To take NFC payments, you’ll need an NFC-enabled reader, but that’s just one side of the issue. Digital e-wallet payments must also be accepted as part of your credit card processing agreement. This is something that most (but not all) merchant account providers do. NFC payments typically have the same processing costs as normal card-present payments, however precise pricing may vary based on your merchant account and plan.
To discover more about some of our favorite merchant accounts that accept NFC payments, go through the tabs below:
The cost of an NFC reader is $24.99; the cost of a reader with a stand is $79.99. 2.7 percent processing charge Individuals and one-time payments are the best candidates. For further information, go to: Check out our PayPal review here.
PayPal may be found here.
The cost of an NFC reader is $199. Interchange + 0.3 percent + 8 cents is the processing cost. Storefronts and brick-and-mortar enterprises are the best fit. For further information, go to: Check out our Helcim review.
Pay a visit to Helcim.
The cost of an NFC reader is $69 Processing fee: 2.7 percent + 10 cents; select programs have cheaper rates. Best for: Companies who wish to take NFC payments using their current merchant account, since Clover is compatible with a variety of processors. For further information, go to: Check out our Clover review.
Pay a visit to Clover.
The Advantages of NFC Payments
- Quicker checkout: Contactless payments are up to 10 times faster than traditional in-person payment methods, according to Mastercard.
- Allow clients to choose the payment option that they are most comfortable with for a better, more convenient customer experience. Consumers prefer digital wallet payments 40% of the time, while contactless card purchases are preferred by 37%.
- Increased security: Using NFC technology instead of swiped card payments is more secure. In reality, NFC technology has helped to reduce credit card theft in stores.
The Future of NFC Payments for Small Businesses
NFC payments aren’t technically a new technology, but they’ve taken a long time to catch on with both companies and consumers. Only 51% of iPhone owners, for example, have Apple Pay (the most popular NFC payment method) activated on their smartphones.
NFC Payments are Reluctantly Accepted by Shoppers
According to an eMarketer poll, buyers’ main reason for not using NFC payments is security concerns. NFC payments, on the other hand, are one of the most secure payment methods accessible, as we previously said. The primary reasons why customers do not utilize NFC payments include security concerns, as well as a lack of knowledge about how to use mobile wallet purchases and where they are accepted.
Concerns from retailers about NFC payments
The cost of adopting and accepting NFC payments is a major issue for 75 percent of businesses, according to a research done by the National Retail Federation and Forrester, while 65 percent are worried about cybersecurity concerns and 63 percent are concerned about increasing fraud.
COVID-19 Increased the Adoption of NFC and Contactless Payments.
At the outset of the epidemic, however, there was a lot of skepticism about NFC payments from both buyers and business owners. Contactless payments increased by 40% in the first quarter of 2020, according to MasterCard.
Despite the fact that digital wallet payments account for a tiny fraction of total POS transactions, they are getting more popular as customers abandon cash and debit.
The National Retail Federation found in the same Forrester poll that by 2020, 58 percent of stores would accept contactless payments, up from 39 percent in 2019. No-touch payments accounted for more than half of all in-store transactions, according to 19 percent of merchants polled in August 2020.
NFC Payments Aren’t Going Away
94 percent of merchants anticipate to see a rise in contactless payment use, according to the National Retail Federation.
It also discovered that 67 percent of customers who made their first contactless phone or card purchase in May 2020 were happy with their experience. And 57 percent said they’ll keep using the payment option when the epidemic is over. 74 percent of worldwide customers expect to continue using contactless payments after the epidemic is over, according to MasterCard.
Conclusion
To take NFC payments in your shop or company, you’ll need an NFC payments-enabled reader. Startups and small-to-medium-sized businesses may simply add this functionality by obtaining low-cost NFC payment scanners from reputable small-business payment processors.
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