6 Benefits of Contactless Payments For High-Risk Businesses
Contactless payment systems are being used today much more often by business owners than in previous years. They provide particular benefits to businesses that banks and traditional payment processors consider to be high risk, such as those with products like subscription boxes, e-cigarettes, firearms, and adult goods. Even if you have received a high-risk designation, merchant banks offer contactless payment systems designed for your particular industry. By adding these systems to your arsenal, you can stay ahead of your competitors and offer the latest technology to your customers. Today we will cover a few of the benefits you can take advantage of to streamline your payment processing.
1. Contactless Cards Are More Secure & Reduce Fraud
Over the past few years, debit and credit cards have gone through significant advancements in technology. For decades cards used the magnetic strip to allow a person to swipe when making transactions. All of that changed in 1996 when Visa and Mastercard introduced smart chip-enabled cards that used encrypted communication to complete transactions. The new EMV technology was used all over Europe but not in the U.S. until 2015. Although banks in the United States were slow to move, they eventually converted the magnetic strip cards to chip cards and contactless cards. This provides a huge benefit for companies that process what banks call high-risk transactions, helping them operate their business with greater security and take payments more reliably.
With this new technology, banks could eliminate the practice of cloning credit or debit cards and prevent fraud. Gone were the days of using a reader and copying credit card information from the magnetic strip. Today’s contactless cards use near-field communication or NFC for short. To use cards with NFC communication, the user must hold the card at a distance between 4 and 10 centimeters from an RFID reader. It is impossible to skim contactless cards or steal any bank data or account information. In the case of a stolen contactless card, the culprit can only make a limited amount of transactions before the contactless option is disabled. When this type of activity occurs, the bank will cover the costs.
2. Viruses And Bacteria Are Less Likely To Spread
In today’s world, pandemics are becoming more and more frequent on a global scale. The practice of social distancing, mask-wearing, and sanitization are commonplace. As a business owner, cleanliness must be the priority for your establishment and employees. You must provide an environment where everyone feels safe and protected from unseen threats. And most importantly, if employees are out sick, your business will not run efficiently. And if customers are uncomfortable in your establishment, they will take their business elsewhere.
COVID has caused a shift in demand from cash to contactless payment methods. The trend of fewer cash transactions year after year will continue into the foreseeable future. The primary reason you don’t see as much cash during a pandemic is that money is the perfect vehicle for viruses and bacteria. According to a 2002 study, 94% of bills in circulation tested positive for bacteria. Germ-infested currency can provide environments that bacteria thrive in for weeks at a time. Think about the number of times money changes hands after printing or minting. That number could be in the thousands. Therefore it makes perfect sense that a contactless payment system would be the most hygienic option to keep your employees and customers safe.
3. Faster Payment Processes Increase Customer Satisfaction
The design of contactless payment cards allows cardholders to tap their card or mobile device to a reader to complete the transaction. Customers don’t have to insert the card, punch in a PIN, or press any buttons. This streamlined payment process is faster and much easier to complete. If you can eliminate the number of steps in the transaction process, the customer can get out of the store quickly and move on with their day. Many contactless readers give the customer the option to have the receipt emailed to them if they like. Paperless transactions save even more time and reduce the need for paper receipts.
For the average customer, 5 to 10 minutes is generally the longest they are willing to wait. If they have to wait any longer than that, they’re likely to leave your establishment. One of the biggest complaints consumers have is the wait time. Nobody likes to wait in long lines, especially if they feel the wait is unwarranted. Take this issue into consideration as it can drive customer satisfaction down. While having well-trained staff capable of providing good customer service is a must, having contactless cards is an option that will save time. Your customers will appreciate the shorter wait times and most likely do business with you in the future.
4. Buy Now Pay Later Options Are Becoming More Popular
The use of buy now, pay later options has increased dramatically since the pandemic started. According to a Time Magazine report, 45% of consumers in the U.S. use this option every month. Companies such as PayPal, Afterpay, Affirm, and Klarna allow the customers to pay for larger purchases with smaller payments broken up over time. The customer usually has several options regarding the term and payment amounts. The approval process consists of a few questions and a quick credit check. Once approved, the customer can make transactions in just a few minutes. With the added benefit of interest-free plans, buy now pay later options have become more popular than making one-time payments.
Mobile wallets and contactless payments go hand in hand with this payment option. The majority of consumers prefer this option over using a credit card if available. As a result, overall spending and customer satisfaction have increased. For business owners, this represents an opportunity to increase sales and revenue simply by implementing contactless payment options. Considering the steady increase of people who use digital wallets and contactless cards, buy now pay later options are a must if you want to stay competitive. They are here for the foreseeable future and create a win-win for the merchant and the consumer.
5. Increased Participation in Loyalty Programs & Apps
Did you know that businesses started offering loyalty programs to consumers way back in the 18th century? That may sound unfathomable to you, but it’s the truth. Companies were looking for a way to increase customer retention and lower acquisition costs. The idea of increasing profit margins while keeping ad spend down has been around for a long time. When loyalty programs hit the marketplace, only the wealthiest companies had the power to implement these types of marketing strategies. But as time has passed, loyalty programs have evolved and become more commonplace. Ecommerce and digital payment platforms have made it easier for anyone to create a loyalty program. People are loyal to brands they like, and they like brands that make it convenient to shop with them. Features like contactless payment and proactive voice messaging make for a more simple and satisfying customer experience.
In today’s digital environment, a good loyalty program can provide your business with a serious boost to your bottom line. According to a recent study, 87% of consumers want companies to offer a loyalty or rewards program. Over the past year, loyalty memberships have increased, and that trend is likely to continue. Your existing and prospective customers are always searching for the best deal. Coupons, rewards, and discounts are at the forefront of nearly all purchase decisions. Customers feel like they’ve won when they save money. If you don’t already have a good loyalty program or store app in place, you should consider implementing one as quickly as possible. It could very well be a critical component in your eCommerce marketing strategy.
6. Contactless Systems Can Reduce Hardware Costs
Depending on the type of software and hardware that your business uses to process transactions, switching to a contactless platform will more than likely save you money. A basic POS system consists of a card reader, touchscreen, receipt printer, and cash drawer. The initial cost could be between $300 and $2,000 on average. Determine which features your business requires to determine a specific amount. Find out if your business is in a high-risk industry and consider your monthly budget before choosing a provider. Transaction fees can vary between platforms, so calculate them into the overall costs. As technology has continued to evolve, payment platforms now offer more options than ever before.
If your budget is tight or you don’t need a full suite of point-of-sale components, you might want to consider a web-based or mobile POS system. Mobile systems run on tablets and smartphones and could be a smart option for small business owners. Companies such as Square, Shopify, and PayPal have products designed to be compatible with Android and iOS devices. Each of these platforms accepts all major credit cards and has reasonable fees. In the end, you’ll want to choose a platform that best suits your industry.
Put the Benefits of Contactless Payment Into Action
Well, that about sums it up. We’ve just gone over 6 of the best benefits you can expect when implementing contactless payment platforms into your business. Of course, there are more, but you should have a better understanding of what we’ve just covered. Contactless platforms are ideal for brick-and-mortar stores, restaurants, or businesses where customers wait to complete checkouts and transactions. So now it’s up to you to put in the effort and do your research. We’re confident you’ll experience increases in customer satisfaction and repeat business!