Sell more and limit exposure to germs using contactless payments methods

Cellphone and POS

The coronavirus pandemic has created economic shockwaves around the world, and the long-term effects on the business landscape are still taking shape. The shelter-in-place orders that kept people out of public venues for over two months have also normalized digital-only experiences and transactions, which could permanently alter consumer behavior. These changes extend all the way to the transaction-level, including how people pay for products and services.

In the past few months, much attention has been paid to the ease with which germs can spread in public simply from touching surfaces. A viral video showcased how one person’s germs could spread to the hands of every single person at a buffet in a matter of minutes. Viruses and bacteria have always been easy to transmit to others in public, but public concern about this issue has reached an all-time high.

Many businesses are pushing customers to use debit and credit cards, or utilize contactless payments, in an effort to mitigate the spread of COVID-19, opting instead for debit and credit card-only payments. However, there are understandably concerns about how even this doesn’t allow for enough social distancing.

Demand for fully contactless payments are surging, and it’s imperative that business owners address consumers’ concerns—both to continue making sales, and to protect the public from disease. According to the 2020 American Express Digital Payments survey, 58% of consumers familiar with contactless payment methods are more likely to use them as their primary method of payment moving forward.

What are contactless payments?

Exactly as the name implies, contactless payments are financial transactions that can be made without any physical contact between two parties or devices.

This form of payment has actually been around for over a decade thanks to ecommerce. If you’ve ever purchased a product online, you’ve technically made a contactless payment. But the technology for these sorts of digital payments have evolved into more real-time, in-person transactions, replacing cash and even credit cards.

Online & Mobile Apps

Since the start of the COVID-19 crisis, many restaurants have stopped accepting in-person payments for pickup and delivery orders, only processing transactions online. Delivery apps like DoorDash and online ordering platforms like GrubHub can handle digital payments for restaurants within their own ecosystem, but I have seen many local eateries in LA accepting payments directly through their own websites. This limits contact only to the food pickup, itself.

Digital wallets and cash apps are also popularizing contactless payments. In 2019, I went to a flea market and encountered a number of merchants who weren’t set up to take credit cards, but were happy to accept payment via Venmo. The only contact that was made was actually picking up the merchandise.

Near-Field Communication (NFC) Payments

If you’ve ever been to Asia, you’ve probably noticed the prolific use of mobile-payment interfaces, especially in China. According to data from 2019, approximately 577.4 million Chinese consumers use contactless mobile payments on a daily basis (by far the largest population in the world), but these numbers are growing exponentially in response to the COVID-19 pandemic.

These types of payments are made possible by near-field communication (NFC) technology. In these types of transactions, the point-of-sale (POS) device emits a radiofrequency field several inches from the broadcast point. Once a retailer is ready to accept payment, consumers simply hold up the mobile or tap-to-pay credit card to the POS terminal, and the device will automatically read the payment information and complete the transaction. NFC mobile payments are all the rage in China, but here in America, contactless credit cards are becoming increasingly available.

Benefits of contactless payment

In April, Mastercard reported that contactless payments had jumped a staggering 40% as a direct response to the coronavirus pandemic. However, even when things return to normal, contactless payments are expected to stay—and eventually grow into the main form of payment.

Mitigate the spread of germs

The threat of coronavirus infection will dissipate, but consumers are likely to be more conscious about the spread of other germs moving forward. Adopting contactless payment is a great way to mitigate the spread of seasonal flu viruses, which kill tens of thousands of people in the US every single year. Widespread use of contactless payment could prevent a pandemic of this magnitude from ever happening again.

More convenience

The primary benefit of contactless payments has always been convenience. There’s no fumbling for cards, no swiping or insertion into a machine. Just tap and go, or press the send button on your phone.

More secure transactions

In spite of fears and misconceptions, contactless payment methods can be substantially more secure than credit and debit card transactions.

In the case of mobile payment methods, such as Apple Pay, customers’ credit card information is not stored on Apple’s servers. Additionally, the credit card information is not transmitted to the merchant either, providing an additional layer of security for the consumer’s sensitive information.

Gather more data

When customers opt to utilize mobile payments, it allows merchants to automatically collect data through the transaction itself, rather than trying to sell signups for a loyalty program. Big grocery chains are famous for trying to get their customers to sign up for a discount program that requires filling out a long form in exchange for a barcode that has to be scanned at every purchase. Other chains opt to collect and tie rewards to phone numbers instead, which have to be given to the cashier during every transaction. These barriers can be bypassed with mobile payments, and provide massive amounts of data on what products are selling best and to whom, when the ideal time is to run a promotion, and other valuable information that can make a marketer’s dreams come true.

Contactless payment options for merchants

Apple Pay changed the game in America when it launched in 2014. But since then, the market has grown massively, with contactless and mobile payment options like Samsung Pay, Chase Pay, Android Pay, and Microsoft Wallet. Many newly issued credit cards are also enhanced with chips that allow for tap-to-pay functionality. Even individual retailers have launched their own mobile payment platforms, including Walmart and Kohl’s.

As a small business owner, you don’t have to worry about having accounts on each of these platforms in order to accept contactless payments. What matters is your point of sale terminal.

Most new point of sale terminals already include the technology to wirelessly read payment information.

Some terminals, such as Clover, actually specialize in tap-to-pay functionality.

Read the instructions of your current terminal to see if it accepts contactless payment methods. If not, it might be time to upgrade to a newer mode. Welcome to the future!


Dustin Clendenen
Dustin Clendenen is a Los Angeles-based writer focused on personal finance, social impact and technology. His work has appeared in Yahoo! Finance, Business Insider, and Upworthy. Learn more at www.DustinClendenen.com.

Hi there! This post exists to offer you (hopefully) useful information and insights, but it cannot take the place of personalized professional advice. Please consult a qualified expert if you have questions about your business. Also, Azlo doesn’t endorse any third-party sites that are linked here.


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