What are contactless payments?
A contactless payment is a transaction that occurs without the physical contact of a credit card to a payment terminal, device, or other point-of-sale system. When a contactless payment is initiated, customers are usually instructed to “tap-to-pay,” meaning they only need to hover their card near the contactless reader and the payment will be accepted. But these types of transactions aren’t just made with credit cards. Contactless payments can also be made with smart phones and wearable devices.
Software companies can offer contactless payment acceptance to their users by partnering with a payments provider that supports a seamless integration of contactless technology plus the payment terminals and devices needed to accept contactless payments at the point-of-sale.
3 key takeaways about contactless payments
- Contactless payments have become a preferred way to pay among consumers, making it a necessary method for businesses to accept if they want to stay relevant and deliver convenience.
- Contactless payments made with cards, smartphones, and wearable devices are supported by Near Field Communication (NFC) technology that enables wireless transfer of data from the payment to the point-of-sale.
- Software companies have an opportunity to add value and convenience to their platform by integrating contactless payments through a partnership with a payment provider.
How software companies can embed contactless payments into their platform
Software companies grounded in customer centricity are driven to meet the needs and exceed the expectations of their users. Offering access to preferred payment acceptance methods like contactless transactions through platforms gives users the control to build their ideal checkout experience. The key is finding a payments provider that delivers a broad set of payment acceptance capabilities to support today’s omnichannel needs. By activating Embedded Payments including contactless transactions, software companies can elevate the value of their platform and strengthen the retention of their user base.
Examples of contactless payments
- Contactless enabled credit and debit cards
- Smart devices with mobile wallets like Apple Pay® and Google Pay™
Contactless payments FAQ
How do contactless payments work?
Contactless credit cards and devices use Near Field Communication (NFC) to complete transactions. NFC is a short-range wireless technology that enables a credit card, smartphone, or wearable device to exchange data with a payment terminal or POS system when within range of the contactless reader.
What are the benefits of embedding contactless payments into a platform?
Offering convenience and speed, contactless payments have quickly become a preferred payment method among customers for in-person purchases. The fact that nearly all of today’s credit cards, smartphones, and wearable devices are equipped with NFC or contactless technology, makes it an obvious choice for businesses to accept. Software companies that offer contactless payment acceptance through their platform meet the needs of their users to deliver a modern buying experience to customers.
How can software companies protect contactless payments processed by their users?
NFC payments are one of the more secure forms of payment acceptance. The NFC technology in credit cards, smartphones, and wearable devices isn’t always active — data is only transmitted when in use during intended payment transactions. Sensitive data associated with each transaction, like card numbers and cardholder information, is also encrypted and tokenized.
Terms related to contactless payments
- Card-not-present
- Payment facilitator
- Payment processor
- Integrated payments
- Integrated software vendor (ISV)
- Independent sales organization (ISO)
Learn more about white label merchant processing
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- Glossary: 117 software-led payments to know
- What are omnichannel payments?
- The value of taking a digital-first approach to software-led payments