Have you ever been to a bricks-and-mortar store where you saw customers swiping their credit/debit cards or other digital payment tools at the POS to complete their transactions? The benefits of these contactless payments go beyond safety.
Contactless payments, such as payments through your mobiles and card readers, have gained immense popularity in the post-COVID world and it’s not hard to see why. Customers and retailers have embraced these fast and convenient payment methods to achieve safe and hassle-free payments.
At this point, you may be wondering if contactless payments are worth all the hype or if they’re overrated? In this post, we’ll outline the key advantages and disadvantages of contactless payments so you can decide whether you should follow this trend. Let’s start with the pros.
Pros of Contactless Payments
They’re Easy to Use
Customers no longer need to enter their PIN codes at the checkout counter – instead, all they have to do is swipe the card at the point of sale and enter the amount. This means your customers can leave their bulky wallets, cash, and cards at home.
For businesses, the ease-of-use is one of the biggest advantages of contactless payments. You don’t have to count the cash, store it, double-check the money, and deposit it into your bank at the end of the day. With POS card readers for transactions, you will enjoy shorter queues and faster transactions.
They’re More Secure
Encryption and two-factor authentication systems of contactless payments guarantee the maximum level of protection to your customers. Consumers find these kinds of payments safer not only because they eliminate physical contact, but also because they ensure safe transactions as well as being highly flexible. There’s no need to carry cash – instead, your customers can make payments through a mobile app or by swiping their card at the POS.
They Offer Better Customer Experience
The ultimate goal of any business is to retain its existing customers. One of the most effective ways to achieve customer satisfaction is to offer them flexible payment options. Your customers won’t have to worry about having to stand in long queues to clear their payments. Flexible payments and a quick checkout process make contactless transaction systems the best option for all types and sizes of businesses.
You can also build customer loyalty by introducing loyalty programs for clients who use your tap-to-pay system for making payments at your store. For example, you can offer a special 3% discount on all purchases made through your contactless POS – this is a great way to get your customers to switch to contactless payments, as well as build customer loyalty in general.
They Offer Fast and Hassle-Free Transactions
Contactless payment systems work twice as fast as regular payment options, thus making it easier for both customers and retailers to process a large number of transactions quickly. Even if you have hundreds of customers at your store, checkout speed is never going to be a concern with the contactless transaction systems in place. On average, a single transaction takes around 15 seconds to complete.
They’re More Affordable
There are no hidden or extra charges for payments made through card readers. Your business will only pay the processing fee that you’d pay if you’d used traditional payment methods. The upfront cost might be high, but you’ll likely find that it pays for itself in a year.
Think about it – you only need one staff member at each checkout counter to monitor payments. Even if you run a supermarket and have long queues of customers waiting at the checkout, you don’t need to employ many people to take cash payments or record each transaction manually.
Cons of Contactless Payments
Modern technology and innovations in POS card readers have addressed many concerns businesses had in the past with contactless payment systems. Still, there are a few drawbacks that you should be aware of.
Security Issues
There’s no denying that contactless payment systems are highly safe and secure. However, they do carry a risk of fraudulent transactions as these systems don’t require a PIN. Therefore, any stolen card could be misused. The good news is that most banks offer a 100% protection guarantee from any type of fraudulent transaction, though you’ll have to inform your bank immediately about any unauthorized transactions.
Technical Issues
Your customers will need an NFC-compliant device to process contactless payments.
Limited Acceptance
While more and more retailers are accepting contactless payments there are still some retailers who are not yet embracing this trend.
They Don’t Work Internationally
While mobile payments are the most flexible and safest form of payment, they don’t always work internationally. You likely won’t be able to use your e-wallet to process transactions abroad and if you can, there is a good chance you will incur high foreign transaction fees.
The contactless payment trend has intensified among modern consumers. Whether you are shopping online or buying things at a bricks-and-mortar store, contactless payments are not going out of fashion anytime soon.
