Contactless Payments: The Missing Piece of the New Point of Sale
Contactless transactions are fast, simple and highly intuitive. They're a natural fit for the fast-paced lifestyle of today’s consumers. In a seemingly instantaneous manner, the tiny antennae embedded inside credit cards and smartphones communicate with payment terminals to transact purchases.
Due to the near ubiquity of mobile devices, however, contactless payments are experiencing a mobile-heavy shift. Over the past year, branded mobile wallets like Apple Pay and Android Pay garnered more widespread adoption and popularity. More and more merchants and financial institutions rolled out their own mobile programs for customers. Even social platforms like Facebook and Snapchat are increasingly facilitating peer-to-peer payments.
Digital payments, which for years lagged behind other platforms and fell short of reaching their full potential, are gaining unprecedented momentum and becoming established as viable payment options thanks to this mobile boost.
Mobile and the New Point of Sale
With buying power at their fingertips, consumers have become the new point of sale (POS), and the rise of contactless hasn't slipped their attention. Consumers expect omnichannel integration across all touchpoints — in-store, online and via mobile. Many want to begin shopping online, buy products in-store and pay for it on their phone, all with seamless transitions between platforms.
From accepting contactless payments at the POS to hosting a mobile program with in-app buying, merchants can ride mobile’s momentum to reach their customers how they want to be reached. This is an opportunity for businesses to differentiate themselves from the competition and provide a seamless and connected experience that keeps customers coming back time after time.
No Sign of Slowing Down
Worldpay’s Global Payments Report predicts that by 2019 total U.S. spending via digital wallets will reach $647 billion (up from $387 billion in 2014), making it the most popular payment method. Moreover, global e-commerce is expected to reach $2.4 trillion by 2019, with 23 percent exclusively from mobile devices, according to Worldpay.
The stage has been set, and merchants that tap into mobile’s potential only stand to gain. Consider the three points below to make the most of this move towards contactless transactions:
1. Check if your POS terminals are equipped with NFC capabilities. Your existing terminal might already be able to process contactless payments. In fact, many EMV-compliant terminals have built-in NFC capabilities. If that’s the case, all you need is a quick call to your payments provider to get the NFC reader enabled. If your card machine is a bit older it may not be capable of taking contactless payments, and you’ll need to replace it with a newer one that can.
Working with the right payments partner to accept mobile transactions couldn't be more important. Choosing the right partner with deep-rooted mobile expertise in the payments space can provide a comforting safety net, particularly for those merchants accepting contactless payments for the first time.
2. Set up a project team to promote your contactless payments capabilities. Once you’re set on rolling out a contactless initiative, follow through with well-informed employees and customers. Establish a project team to promote the new offering and educate your workers so they, in turn, can clarify any confusion among customers.
Card machine wraparound advertising, additional counter signage, in-store ads and email communications are all effective ways to get the word out. Employees can play the most pivotal role in telling your card-carrying customers they can also pay with an alternative method. In addition to being positive and upbeat about your new capabilities, employees should understand the basics of the contactless program, such as added benefits, security features, any restrictions and more.
3. Make your mobile payments experience as simple as possible. Consumers want easy, effective designs that let them get in and out with their purchases as quickly as possible. The visual aesthetic is important, but a design that accommodates speed and repeatability should be the primary goal.
Work with your developer to set up a program with as few steps to check out as possible. That way, customers don’t have to wait too long before they can tap their card or phone to pay. Additionally, payment processing features like credit card vaulting, pre-authorization on transactions and one-touch payment functionality can be set up by your payments partner.
Switching to contactless payments is all about offering your customers the choice of their preferred way to pay. It provides a convenience that can even improve the purchasing experience and drive higher customer retention.
Chas Gannon is the senior vice president of Worldpay US, a global payments technology provider for any platform: in-store, online and via mobile devices.