The COVID-19 pandemic has majorly affected many industries and the retail industry is no exception. Retail businesses heavily rely on cash transactions and other payment methods that involve physical contact. Social distancing and other restrictions created big trouble for both consumers and retailers. Thanks to the latest technology of contactless payment that made it easier for retailers to offer a safe and advanced payment solution to their customers.
The trend of mobile payments is gaining popularity and has now become an important part of the retail industry. Businesses that are adopting this recent technology are successfully improving the purchasing process for consumers.
Contactless payment, as the name suggests, doesn’t involve any physical contact, which means consumers can pay for products or services without touching the point of sale (POS) terminal. All you need is to tap a card reader by using your smartphone, mobile wallet, or contactless credit card. The transaction will be completed after the wireless connection is made.
Here are some interesting statistics that will surely convince you to introduce contactless payment to your retail business.
- Approximately 760 million users made a contactless payment in 2020 and the number continues to grow in the near future.
- The market revenue in the United States is expected to reach $358 billion by 2025.
- With the advent of technologies like digital wallets, and Visa contactless cards, the usage of contactless payments in the U.S. has grown to 150% from March 2019 to 2020.
- 30% of consumers tried contactless payment methods such as cards and smartphones for the first time during the COVID-19 pandemic.
- A study conducted by National Retail Federation suggests that retailers that had implemented contactless payments are willing to continue this payment trend as it accounted for more than half of the in-store transactions.
Types of Contactless Payments
Contactless payment, also called touchless payment, tap and go or tap to pay uses highly advanced technologies that account for a successful transaction. For these types of payments, there is no need to swipe, sign in or enter the PIN for making a transaction. All you need is to tap a payment card or a smart device to a reader and you are all done.
- Near Field Communication (NFC) Technology
Apple Pay, Google Pay, Android Pay, and Samsung Pay are using NFC technology for making contactless payments possible. Smartphones store shoppers’ credit card details in a mobile wallet and use NFC technology to enable the device to exchange the data with the payment terminal and accept the payment.
- Radio Frequency Identification (RFID)
Radio Frequency Identification (RFID) is a highly advanced technology embedded in the credit and debit cards’ microchips. When a contactless payment is made, RFID technology embedded inside the contactless card communicates the device and offers a secure and touch-free transaction.
Today, more and more banks are leveraging contactless technology and embedding this technology into credit and debit cards. Visa, Mastercard, and American Express have introduced microchips in the smart cards, making it possible for customers to make touchless transactions.
- Mobile Wallets
Mobile wallets have now become the most popular payment method that uses RFID technology. Consumers need to simply enter the credit card details into the digital wallet, open the app, and tap the smartphone on the point of sale terminal to complete the transaction. To make these transactions secure and safe, mobile app developers are using facial recognition, and fingerprint ID to prevent fraudulent activity.
- QR Code-based Payment Method
Today, the trend of using QR codes in the retail, hospitality, food, and beverage industries is gaining significant popularity. It serves as a versatile tool for delivering an excellent touchless customer experience. QR codes look similar to barcodes that eliminate the need to make traditional in-store payments.
With the help of smartphones, shoppers can scan the QR code and make online purchases via a personalized checkout page on an ecommerce store. A study suggests more than 41% of US shoppers want more stores that allow them to pay in-store using a scan and pay technology. It is because it is the easiest and safest method to pay that offers a frictionless customer journey.
QR codes automatically apply the promo, discount code, or special sale offer at checkout which makes it a preferred method for a majority of shoppers. 34% of consumers prefer to use QR-code-based payment methods and expect more and more brands to offer this latest touchless payment technology.
Are you Ready to Implement Contactless Payment Technology?
Contactless payment is one of the best alternatives to traditional payment methods. It is packed with a number of benefits for retailers and shoppers. In fact, contactless payment is the future of payments.
A More Secure Option
This payment technology is embedded in the microchips of the contactless cards. Payment terminals that are registered to retail businesses can fetch the data using the microchip. In addition, biometric verification will minimize the risk of fraudulent transactions.
Faster Transaction Time
This type of payment is the fastest way to make transactions which takes only 12.5 seconds to complete the payment process. The faster transaction time will eventually result in shorter queues and significant increase in revenue.
Amazing Checkout Experience
Offering a great checkout experience can increase customer loyalty and generate more profit. By providing customers with their preferred payment option and offering a quick and easy checkout, you can take the in-store shopping experience to a whole new level.
Minimize the Risk of COVID-19 Transmission
Due to the COVID-19 pandemic, now consumers expect retail brands to offer contactless payment technology to make hands-free checkout possible and reduce the risk of virus transmission. It significantly increases the need for more and more contactless payment options to utilize this advanced payment technology.
Contactless payments make it easier for retail, grocery, pharmacy, restaurants, and food and beverage industries to offer a fast, easy and enjoyable experience to their customers. Due to the COVID-19 pandemic, now customers want contact-free payment options. Fulfilling the demands of your customers and introducing contactless payment technology to your retail business will definitely help your brand grow and succeed.
Irfan Ak is an experienced digital & content marketing strategist at Branex. A pro mobile app development company He is a regular contributor on various websites. He has worked with several brands and created value for them.