As COVID continues to take its toll on the US and other parts of the world, contactless payments are beginning to rise in popularity. This type of payment is becoming more and more ubiquitous in other parts of the world, and Americans are starting to see its benefits as they realize that this may be the way of the future.
This article will talk about what contactless payments are, how they work, and everything you need to know about them to make the switch!
What are Contactless Payments?
Contactless payments are a type of electronic payment where you can use your credit or debit card to make purchases without physically touching the card reader. This is done by holding your card up to a contactless reader, then processing the payment.
With its ability to pay for goods or services without needing to swipe physical cards, these payments are much more hygienic than traditional methods. This is especially important during a time like COVID, where contact with surfaces that may be contaminated is to be avoided at all costs.
Banks and card issuers have been quick to promote contactless payments as a safer alternative to cash and card payments. In fact, the use of contactless payment has increased by 150% since March of 2019.
How Do Contactless Payments Work?
You will need a contactless-enabled credit or debit card for contactless payments to work. These cards have a special chip that emits radio waves, which are then picked up by the contactless reader. When you hold your card up to the reader, it will pick up the signal and process the payment.
The contactless reader will then either approve or decline the transaction. If approved, you will usually see a green light and/or hear a beep. If it is declined, you will see a red light and/or hear an error tone. This payment often relies on near-field communication (NFC), a newer and more complex technology under the RFID (Radio Frequency Identification) umbrella.
However, unlike RFID, which works at a distance of many feet, NFC works at a distance of a few centimeters. This makes contactless payments much more secure, as it is very difficult for someone to pick up your card’s signal from a distance. The NFC technology enables these payments to be made on various everyday transactions.
In banking, cardless ATMs allow customers to withdraw cash without the need for a physical debit card. This is done by using the contactless-enabled credit or debit card to generate a one-time use code that can then be used to withdraw cash from the ATM.
Benefits & Considerations of Contactless Payments
Many experts consider NFC payments to be one of the most secure types of electronic payments. The technology uses similar standards established by EVM (Europay, Visa, and MasterCard) chips, which the United States payment forum regards as an effective way to reduce fraud.
Cardholders can check what specific steps ensure data security for added satisfaction and peace of mind. In addition, tons of dedicated FAQs address customer inquiries and concerns about the safety and effectiveness of contactless payments.
Visa addresses the technology behind contactless payment on its official website. On the other hand, Apple Pay offers a long yet very informative explainer about contactless payment and the employment of data encryption on its support forum.
Contactless payments are convenient in helping customers, banks, and retailers conduct swift, seamless, and socially distant transactions to avoid the spread of COVID.
Once set up, the system is 100% maintenance-free. With that said, here are other benefits that contactless payments have to offer:
- Quick and easy: No more fumbling for cash or waiting for change. Just tap and go!
- Secure: Contactless payments are more secure than cash because they rely on encrypted technology, making it difficult for fraudsters to copy your card information.
- Convenient: You can use contactless payments anywhere you see the contactless symbol. Look for it at checkout and tap to pay.
- Flexible: You can make contactless payments with your contactless-enabled credit or debit card.
On the other hand, there are a few considerations that you should take into account before using contactless payments:
- Limited to small transactions: Most retailers limit contactless payments to $50 or less in the US. This is because these payments are designed for small, everyday transactions—not large purchases.
- May not be accepted everywhere: While contactless payments are becoming more widely accepted, some places still don’t accept them.
- Requires a contactless-enabled device: To make contactless payments, you’ll need a contactless-enabled credit or debit card.
Embrace Recurring Billing with ReliaBills
With payments shifting to contactless, recurring billing has also increased in demand. Therefore, it only makes sense to move towards the most in-demand form of payment processing to complement contactless payments as a business owner.
ReliaBills is a payment processing system that specializes in invoicing and recurring billing. Our platform offers tools and features that help you set up a recurring billing system quickly and easily.
With ReliaBills, you can create a solid invoicing and recurring billing system that greatly benefits your business. When you subscribe to ReliaBills PLUS, you get access to the following features:
- Easy invoicing: our platform makes it easy for you to create and send invoices.
- Recurring billing: make sure your customers never miss a payment with ReliaBills’ recurring billing feature.
- Flexible payments: give your customers the flexibility to choose how they want to pay.
- Estimates: quickly create and send estimates to your customers.
- AutoPay: enroll your customers in AutoPay to automatically charge their credit or debit card on their invoice date.
- Customer portal: save time by letting your customers view and pay their invoices online.
- Relevant reporting: track your business’ performance with our comprehensive reports.
- And much more!
For just $24.95 per month, you will get access to all of these useful features and more! So what are you waiting for? Subscribe to ReliaBills PLUS today and see how it can impact your recurring billing efforts.
Wrapping Up
Despite the considerations, contactless payments are on the rise in the US amid COVID. Many people are now using these payments to avoid contact with surfaces that may be contaminated. In addition, they are more convenient and secure than cash. Therefore, with the rise of contactless payments, we may see a decrease in the use of cash overall.
