Contactless payments | Best payment methods for small businesses

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Unlike traditional payment systems, contactless options allow customers to pay for goods and services without having to physically touch anything that has been handled by previous customers. These types of payment systems include smart cards that your customers can use by tapping your POS terminal, mobile wallets that your customer can have on their phone, and QR codes that can be scanned to complete a transaction.

As a small business owner or IT administrator, you may be considering upgrading your current point-of-sale (POS) system to one that supports contactless payments. Or, you might be interested in how you can add a contactless option to complement your current hardware. Regardless of your existing system, adding some form of contactless payment option has many benefits for your customers and business processes, and it can be quite simple to implement.

Benefits of contactless payments

One of the many challenges COVID-19 has posed to owners and operators of businesses of all sizes is the constant sanitization that is required between customer interactions. As such, contactless payments have proven to be an effective solution that reduces the number of times a POS system needs to be cleaned as well as how often a customer needs to sanitize their credit cards. It is therefore logical that a recent study from Visa reported that 20% of small businesses have adopted contactless payment solutions in response to COVID-19.

Possibility of a loyalty program

Similarly, mobile wallets (Apple Pay, Google Pay, Samsung Pay, etc.) have gained popularity for their simplicity and security. Not only are mobile wallets set to transform the way we shop in the not-too-distant future, they also give you the opportunity to introduce a loyalty or rewards card that can be stored alongside debit and credit cards from your customers. Software vendors like PassKit Where PassSlot offer user-friendly platforms that can help design, distribute and management of a tailor-made loyalty program for your customers’ mobile wallets.

Better security

Plus, contactless payment offers better encryption and security than traditional credit or debit cards that use a magnetic stripe and PIN. Whenever a customer uses a contactless payment method to complete a transaction, none of the transferred data can be decrypted to reveal their card number or bank details. They also eliminate the risk of RFID hacking, so your customers can rest assured that their information won’t be stolen when using touch or mobile payments. Most issuing banks protect contactless transactions against fraud, which means you won’t have to worry about filing a dispute to get your money back.

Improved customer experience

However, the ultimate benefit of contactless payments is the efficiency it will bring to your transaction process. While paper money or credit card swiping on an old system can block a quick checkout, contactless payments can make most transactions quick and effortless. This means your customers can have a more positive experience and you’ll be able to serve more customers.

How contactless payments work

Contactless payments can be made using one of two types of technology: near field communication (NFC) and QR codes. You may find that one suits your needs better than the other, or that adopting both solutions in one way or another is the best approach for your business. To understand which method to choose, it is useful to compare the technology required by NFC and QR codes.

NFC transactions are the main contactless payment method in North America. They require two devices, each equipped with an NFC chip. Many credit card providers have launched new cards containing an NFC chip, and new smartphones also support mobile payments using two-way NFC communication. The chips (or tags) do not contain energy by themselves, but they do contain a small amount of magnetic polarity. When they are very close to each other, the magnetic induction charges them and gives them enough power to transfer data. This distance is typically a few centimeters or less, depending on whether a customer is using a credit card or holding an NFC-enabled smartphone near the NFC terminal. In this way, NFC works very similarly to Bluetooth, but requires less power and data transfer is a little faster.

Alternatively, QR codes are the most popular contactless payment method internationally. This type of payment involves a minimum of foreign material; Instead, customers scan a QR code using their smartphone camera and are presented with a link to a payment portal that allows them to choose their payment method and, in some cases, the payment amount. Once the payment is approved and completed, you and your customer will receive successful transaction notifications. Many person-to-person payment platforms like PayPal already support digital QR codes, so these solutions may be ideal if you already use them for other business transactions.

Contactless payment solutions for small businesses

As a small business owner, you can be sure that there is a contactless payment solution you can implement without spending a ton of money. These solutions can range from complementary to full service, depending on your needs and your budget:

  • Solutions like paypal here and Shopify POS offer simple tools to bring the online contactless experience to your physical storefront. This type of solution presents a perfect opportunity to integrate mobile payments into existing e-commerce processes.

  • Sellers love Square offer a variety of solutions that can upgrade your existing systems to include contactless payments for in-person transactions. Even if you can’t afford to update your whole system or don’t want to put in the effort to change it, you can find a balance between new and old that will work for you.

  • If you don’t know where to start but have accounting software you trust, they may offer a POS system that supports contactless payments, such as QuickBooks GoPayment.

Depending on when your current point-of-sale (POS) technology was purchased, an upgrade may be required to support NFC transactions, or you can enable it with the correct software. It can seem overwhelming to even know where to start, so tools like TechnologyAdvice POS System Product Selector Tool can guide you through the process – enter your information and an expert will provide personalized recommendations to help you find the right solution.

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