Contactless payment has become a tremendously popular way for people to pay for goods and services over the past few years. This type of transaction will continue to grow, so what trends and technologies should we watch going forward?
What Is a Contactless Payment?
A contactless payment is a type of card transaction, either physical or digital. The “contact” in question refers to physically touching a payment terminal or device. Some card readers require you to swipe or insert your credit or debit card so the machine can read the magnetic stripe or chip. Swiping is not as common today as chip readers have taken over. The chip contains information relating to your account and generates a unique transaction code for each purchase.
A contactless payment terminal is one you tap. You can hold your card just above the reader and it will usually register the transaction, though many people do actually touch the terminal with their card. Contactless payments also work with digital cards and financial apps on mobile devices.
The Benefits of Contactless Payment
More and more retailers are offering contactless payment, and for good reason:
- Convenience: There’s a principle in business that you should never make it difficult for customers to give you money. Tapping a credit card or holding up a mobile device to a reader is probably the easiest way to pay for something. It’s faster than inserting or swiping a card and doesn’t require waiting for change after paying in cash. With contactless payments, customers don’t need to carry wallets, or even cards, with them everywhere they go.
- Health: With no physical contact occurring, there’s less opportunity for germ transfer.
- Security: Despite its convenience, you don’t have to sacrifice security with contactless pay. It’s probably a more secure form of payment, because inserting a chip into a credit card makes it possible to copy or hack that information.
Trends for Contactless Payment
What’s new in contactless payment? The first trend is simply uptake. The global contactless payment market size already had a massive $34.55 billion value in 2021 and that number could grow at a compound annual growth rate of 19.1% from 2022 to 2030.
Other trends open up new avenues for making contactless payments. These include using wearable devices (such as smart watches) and through business’s apps. Apps encourage customers to patronize that specific business and can integrate with reward programs. Because most people never leave home without their mobile phone, they’ll always be able to pay at businesses that use these apps. Last, businesses are now using QR codes as another way of making contactless payments. Customers can scan the code with their smartphone, opening the payment portal.
If you want to learn more about contactless payments or other ways you can simplify the payment process, Vectra can help. Contact a Vectra Bank professional today and find out how we can help you facilitate payments for your business.
