Last updated on April 14th, 2022 at 11:29 am
Magnetic-stripe cards were the payment norm for many decades after their introduction in the early 1960s. However, fraudsters realized how easy it is to steal and clone bank account information. EMV, another payment method short for “Europay, Mastercard and Visa,” then came on the scene. Europe was an early adopter of these computer-chipped cards. Consumers instantly loved the idea of paying table-side at their favorite restaurants. Convenience is king, afterall.
While still a global standard, EMV card processing is quickly becoming outdated as more modern payment methods take over the transaction space. Below, we discuss tap to pay and how contactless cards continue to evolve.
What is Tap to Pay?
Near field communication (NFC) technology, which allows credit cards and payment readers to communicate when they’re within a couple of inches of each other, enables tap to pay. This low-touch payment option – shoppers just tap their card to a payment reader – is growing in use from subways to coffee shops to retail stores. It’s a popular option for people who are conscious of what they touch. And while this may have been a small segment of consumers in the past, it’s more likely to be many of us now.
Mobile wallets such as Apple Pay, Google Pay, Samsung Pay, etc. also power tap to pay. All you have to do is store your credit card or debit card information on your payment-enabled phone or wearable device. You use it at checkout the same way you would a card, except it is completely touch-free. Even more, you don’t even have to go through the hassle – which we all know it sometimes is – of locating and pulling out your physical card.
In February 2022, Apple announced plans to introduce Tap to Pay on iPhone. This new capability will allow phone-to-phone payments between merchants and consumers. No additional hardware or payment terminal will be needed to accept Apple Pay, contactless credit and debit cards, and other digital wallets. It will be as easy as using an iPhone and a partner-enabled iOS app. Tap to Pay on iPhone is unlocking contactless payment acceptance at scale, making it easier for businesses of all sizes to offer tap to pay.
Benefits of Tap to Pay to the Consumer
Consumers are used to the online payment process being seamless and almost fully-automated. If it’s not just as easy to pay in-store, they’ll likely remember it as a bad experience. Friction at checkout has long been one of retail’s biggest conundrums. Shoppers are fickle and don’t have time for things that are long and complicated. They want to be able to pay quickly and conveniently.
With tap to pay and other contactless payment options that don’t require a verification PIN or signature — and instead use touchless verification measures like Apple Face ID — you can make the overall checkout process simpler. This will also help you reduce lines and speed up average transaction times, which are vital to keeping your customers satisfied.
Benefits of Tap to Pay to the Retailer
Many of the benefits to the consumer apply to retail brands as well. After all, a better customer experience leads to improved customer engagement and increased loyalty, which translates into more sales.
With tap to pay options in place, your store associates won’t get bogged down by typing or using additional hardware, such as physical terminals or other legacy payment technology. This will reduce how long it takes them to facilitate each transaction, boosting not only their productivity but also overall operational efficiency. You can also avoid the challenges that often come with hardware, like devices breaking, running out of battery, losing connectivity, and more. A lighter in-store tech stack is a win for your store associates and your brand aesthetic.
Contactless cards also provide protection against fraud. Each transaction has a one-time encrypted code that provides a safeguard from counterfeiting. Knowing that their personal information will never be compromised can help you quickly foster consumer trust. Security is more important to customers now than ever before, and your shoppers want to know that their data is safe in your four walls.
Tap to pay payments are also a strategic way to use the point of sale for customer capture. The information tied to the contactless payment method, such as an email address, will help build the shopper’s profile. When consumers opt-in, the brand can also seamlessly add them to their loyalty program. This has a whole host of benefits from vouchers to free gifts. Plus, you can send digital receipts without any form-filling. One less physical thing for you and the customer to handle today, and a record of purchase history in case of a return tomorrow.
Future-Proofing Your Retail Brand
Customers expect a seamless omnichannel experience. Whatever you offer on your ecommerce site you need to offer in your storefront. Think simplicity, speed, and safety, above all else.
Core to achieving these things is a mobile point of sale (mPOS) system. All you need is an internet-connected device to enable transactions anywhere in your store. This includes phone-to-phone mobile checkout, which allows store associates to accept mobile payments like Apple Pay without reliance on third-party hardware.
It can take years for a legacy POS to update to accommodate this technology or any other emerging payment method. An omnichannel POS system, on the other hand, can deploy modern payments quickly and without hassle.
The tipping point for retail payments is here. If you don’t offer tap to pay, your consumers might be rethinking where they make purchases.