What’s Up With This Contactless Payment Trend?
The COVID-19 pandemic has changed a lot of things in how we shop and bank. According to a market report from eMarketer, contactless payments, such as mobile-app purchases grew 29%. But, why is contactless purchasing such a hot commodity right now, and why should businesses invest in it?
As a leading merchant processing company, First Direct Financial is proficient in providing processing solutions that work for your business. We’re your partner in making your payments efficient and secure every step of the way. Learn why contactless payment is so prominent in commerce and how it can help your business thrive.
What is Contactless Payment?
Contactless purchasing is exactly how it sounds – a way for consumers to pay for goods and services without having to physically swipe your card or give it to another person. While this trend was fairly prominent before the COVID-19 pandemic, it quickly became a staple in consumers’ purchasing behavior. According to a mid-year survey in 2020, contactless purchasing increased by 69% in retail with 67% now accepting some form of contactless payment.
How Does Contactless Payment Work?
Typically, contactless purchasing works by utilizing radio-frequency identification (RFID), technology built upon electromagnetic fields. RFID uses memory chips that store data and are read through RFID readers that decode the data.
Also, contactless payments rely on near-field communication (NFC), a newer complex technology similar to other RFID solutions. However, it differs in that NFC only works when there is a small distance between objects. NFC technology is the underlying innovation used for services like Apple Pay and Google Pay. People enrolled in these services can pay for items on their smartphones and other devices connected to their “online wallets”.
Benefits to Consider With Contactless Purchasing
Experts generally consider NFC payments to be more secure. The technology utilizes the same standards created by EMV chips, which is effective against fraud and instances of in-store counterfeit cards.
The most obvious advantage of contactless payments is how convenient it is for consumers, retailers, and banks to conduct easy and fast transactions. Moreover, in today’s COVID-19 world, it promotes socially distant transactions to protect everyone from its spread.
What Does the Future Entail for Contactless
According to Forbes, the global contactless purchasing market is expected to grow from $10.3 billion to $18 billion in the next five years. This can be due to the larger push towards contactless alternatives. Some of the ideas that are being developed include:
- Point-of-sale (POS) terminals that allows users to use their smartphones or information to access their funds for purchases
- Contactless payments are expected to overtake physical payments. Countries from around the world are becoming more contactless-friendly. The Financial Brand believes that half of mobile users will be paying by their digital wallets by 2025
- As crypto currencies become more mainstream, contactless payments popularity seems like a no-brainer. If you have cryptocurrency, you’ll likely have a crypto wallet on your phone. As more businesses accept crypto and it becomes more ingrained in our lives, you can expect to see a push for contactless payments.
First Direct Financial Protects You In All Areas of Payment
When you partner with First Direct Financial, you’re not just getting state-of-the-art merchant services, you’re getting a partner. As your financial partner we strive to provide you with services that help you reach your goals and protect your business against hackers. Your complete satisfaction is our primary goal and we assure you we can get you the lowest possible rate with the best quality of service. Contact us today and learn how First Direct Financial can help you with your credit card processing needs.