Touch-to-pay is an extremely convenient payment option that allows your customers to simply “tap” their card or smartphone onto your payment terminalThe device by which a transaction is transmitted to the acquiring bank., instantly processing payment. This option is quick, easy and contactless—and it’s promising to be the new normal for card payments. Still, not all retailers are ready to accept touch-to-pay and you must understand these key considerations.
How Does Touch-to-Pay Work?
Touch-to-pay is also called a “contactless payment.” These types of payments are facilitated by near field communication (NFC), which is a type of short-range wireless technology that allows the two devices (i.e., your payment terminalThe device by which a transaction is transmitted to the acquiring bank. and a phone or card) to communicate. The actual card number is not transmitted directly from the phone to the device, but rather multiple layers of encryption allow your terminalThe device by which a transaction is transmitted to the acquiring bank. to communicate with the card network.
On the customer’s end, they need to start by pulling out their phone or card. With a card, they simply need to hold it within a couple of inches of the terminal’s NFC logo. With a phone, they may need to press a button or open their digital wallet to activate contactless payments and then hold the phone near the reader. In either case, the payment will be processed quickly and the customer will not need to enter their PINPersonal Identification Number used by a cardholder to authenticate card ownership for ATM or debit card transactions. The cardholder enters his/her PIN into a PIN pad. The PIN is required to complete an ATM/debit card transaction. or sign for the purchase.
This method of payment only works with an NFC-enabled card or smartphone, but most chip cards are NFC-enabled today, and most smartphones have this capability. Seemingly, all you need to do is upgrade your card reader so it has NFC functionality. The question is, is it just a gimmick or is it something work upgrading to?
Benefits of Touch-to-Pay
The biggest players in the touch-to-pay space include Samsung Pay, Google Pay and Apple Pay. Over the past few years, these providers have effectively gained tens of millions of users and thousands of retailers have sought to accommodate the growing user base by including an NFC-enabled terminalThe device by which a transaction is transmitted to the acquiring bank. at checkout.
As a small retailer, though, you don’t necessarily have to jump on the bandwagon. While many consumers enjoy using touch-to-pay, this is not yet a standard practice, and the great majority of people are still carrying actual cards with them to handle payment where contactless isn’t an option. With that said, your customers will enjoy plenty of perks if you decide to add NFC to your terminalThe device by which a transaction is transmitted to the acquiring bank.:
- They’re Faster – Contactless payments are about 10 times faster than a payment using a chip or magstripe. As a retailer, you surely despised how the switch from magstripe to chip left customers standing in line for a handful of seconds longer, but contactless maintains the same security without the wait.
- It’s Convenient – While swiping or dipping a card may seem like a minor inconvenience, the modern world is all about improving efficiency, and contactless payments are slick and easy. Whether a customer is using their card or phone, they simply need to hold it near your terminalThe device by which a transaction is transmitted to the acquiring bank., and the payment will process within seconds.
- Truly Contactless – While it’s often called “touch-to-pay,” there is no need to physically touch the terminalThe device by which a transaction is transmitted to the acquiring bank. with the card or phone. The “near” part of NFC means the shopper just needs to hold the phone or card a couple of inches away from the reader. There’s no need to enter a PINPersonal Identification Number used by a cardholder to authenticate card ownership for ATM or debit card transactions. The cardholder enters his/her PIN into a PIN pad. The PIN is required to complete an ATM/debit card transaction. or sign, either, which means it’s a touchless option that keeps your checkout stand more hygienic for everyone.
As a retailer, you won’t notice much difference between a customer using contactless or paying the “old-fashioned” way, although you will enjoy the fact that these payments process extremely quickly. Ultimately, if you’re thinking about adding contactless payments to your checkout counter, the primary motivator should be keeping up with the times and offering this payment method for your customer’s sake.
Should You Add Touch-to-Pay?
The question of whether or not you should add touch-to-pay to your store comes down to circumstances. If you enjoy using contactless payments yourself, then you’ll understand why your customers might be happy to see the NFC logo on the door. With that said, it’s still not a “must-do,” at least not in most places.
When asking yourself if you should add touch-to-pay or not, consider these questions:
- What are your competitors doing? – If you’re going to be the first to bring contactless payments to the block, that’s great, but it becomes more important from a business perspective when your competitors are already accepting contactless. While in itself it’s not likely enough to make a customer shop at one place over another, it’s always important to keep up with the competition.
- Have you invested in other areas? – Contactless payments are part of a bigger movement towards an improved, personalized and modernized customer experience. While you can certainly add them on their own, if you haven’t thought about other aspects of the customer experience, this is probably a small concern.
- Are you already upgrading hardware? – If you’re already in a situation where you’re switching merchantA business that accepts credit cards for goods or services. service providers or you’re upgrading your payment terminals, now is a great time to look into an NFC-enabled terminalThe device by which a transaction is transmitted to the acquiring bank.. There are plenty of options, so you won’t have to look hard.
Ultimately, upgrading your hardware to accept contactless payments shouldn’t be a big deal, especially if you’re working with a reliable merchantA business that accepts credit cards for goods or services. services provider like National Merchants Association. If you’re interested in learning more about the modern hardware we offer, check out our brochure.
About National Merchants Association
National Merchants Association (NMA) is an industry-leading merchantA business that accepts credit cards for goods or services. advocacy group dedicated to reducing or eliminating the unnecessary fees associated with accepting credit card payments.
Since 2004, NMA’s payment processing solutions have been delivering tailored solutions, best-in-class customer service and high-quality service offerings for local and national businesses across multiple industries. Whether it’s high-risk or low-risk, brick-and-mortar or eCommerce, National Merchants Association will create the best processing experience for your company. For more information, visit www.nationalmerchants.com or call 866 509 7199 to get started today!