The use of chip and pin technology has brought many improvements in the way merchants handle card payments. Nowadays, retailers have many options to choose from when it comes to card payment methods. Contactless card payments are one option that retailers can take advantage of and reap the benefits that come along. Before delving into the advantages of this technology, what are contactless payments in the first place?
Well, contactless in this context simply means that the card never touches the chip and pin machine. In other words, you do not have to insert or swipe a debit or credit card to complete a transaction. Instead, the card reader has an antenna that reads the cardholder’s information sorted on the embedded chip of the card. The two devices communicate via RFID (Radio Frequency Identification) technology. In a typical contactless transaction,
- A cash attendant simply waves a debit or credit card in close proximity (usually less than 4 inches) to the POS terminal.
- The cardholder’s information is sent wirelessly to the card reader for verification.
- The host terminal charges the customer by authorizing the transaction and routing it through the retailer’s epos system.
Apart from RFID credit cards, other devices such as key fobs, mini-cards, cell phones and money clips can support contactless payment transactions. Because of how versatile this technology is, many card-issuing companies have chosen to support it. Visa, MasterCard, American Express and Discover Network are examples of companies that support contactless payments.
Retailers however may want to know what is in it for them by adopting cashless payment terminals. The good news about this technology is that it has many benefits for merchants.
Why Introduce Contactless Payments in Your Business?
Contactless payments allow you to:
- Give customers a faster and convenient way to pay: No signature or PIN verification is required when this payment method. This makes it almost twice as fast as a conventional debit or credit card transaction.
- Increase sales volumes and encourage customer spending: A unique aspect aboutcontactlesspayments is that card-issuing companies usually authorize small transactions. For instance, consumers in the UK can make secure everyday purchases under 20, while those in the USA can spend $25. Researchers have found that customers are likely to spend more on contactless payments because they incur small charges. Add this to the fact that RIFD technology can support payments through different devices, and you have a payment method that can encourage spending and increase sales volumes for your business.
- Reduce maintenance costs: With time, daily swiping and insertion of credit and debit cards in conventional card readers takes a toll on these devices. However, contactless chip and pin machines tend to last longer because they do not experience as much physical use as magnetic strip card readers. As such, these units require less maintenance.
- Introduce gift cards into your business: Merchants can take advantage of contactless payments by introducing RFID enabled gift cards. Customers can then redeem loyalty points at a point of sale terminal through gift cards. This is a great way to keep shoppers coming back and enhance your business’s image.
With all the benefits that contactless chip and pin machines provide to retailers, they are an excellent payment method to add at checkout terminals. However, ensure to look for a reputable card reader brand that is compatible with your point of sale system. VeriFone is a good choice that offers contactless payment options on their chip & pin units.