Contactless payments technology — how it works and how to work it. | Payanywhere

As a customer, you are probably already quite familiar with the ubiquitous contactless card reader that lets you complete a sales transaction simply by getting your phone, wearable device, or credit card close to a merchant’s card reader in order for the transaction to go through. But as a business owner, you might be wondering just how this touchless technology works, whether it is secure and how you can adopt tap-to-pay in your own store.

Near field communication: the tech that makes the magic happen.

What makes it possible for someone to merely tap or wave their card, phone, or device near the seller’s reader in order for the transaction to be completed? It’s called near field communication technology or NFC for short. Simply put, NFC is a mode of secure electronic transmission that allows for the transfer of funds from your customer into your bank account. In spite of the fact that customers are generally not required to enter a PIN or provide a signature with tap payments, the transaction is even more secure than one made with a traditional credit card. That’s because the system integrates with the same structure that today’s chip or EMV cards utilize.

Believe it or not, today’s chip cards can actually emit a radio frequency signal. When the card is within four centimeters of an NFC-enabled card reader, the two devices can communicate with each other using something called radio-frequency identification.

When a purchase is initiated, a special chip located inside the merchant’s card reader activates the customer’s card, causing the signal to be transmitted. Before any information is transferred, the signal is encrypted to protect the data from being intercepted by hackers. The data is then translated into a form that can only be decoded by the customer’s bank. Because the encryption is single-use, the purchase process is safe from data criminals. Perhaps most amazing of all, the entire payment takes less than 300 milliseconds.

How to accept contactless payments.

You might be surprised to learn just how easy it is to begin offering your customers the option of paying contactlessly. The equipment you currently have might even be capable of doing the job, requiring no upgrades whatsoever. You just need to get in touch with your payment services provider to learn whether your present system can be configured properly. If not, they would most likely be more than happy to provide you with the equipment and contactless card reader that you will need.

Once you have your contactless-enabled payment terminal in place the transaction goes forward without a hitch. The cashier simply runs the payment through the card reader as usual. The customer brings their card, wearable device, or phone near the contactless card reader. Once the contactless symbol appears, the transaction tokenized information will be processed by the terminal’s software and sent on to the relevant banks and card networks. Seconds later, the transaction will either be processed or declined.

How to get the most out of contactless payments.

Now that you have installed your touchless payments technology, it stands to reason that you want to maximize its efficiency and appeal to your customers. The following are some steps you can take to achieve this goal.

• Make your customers aware that they now have the ability to pay contactlessly. This can be done through signage posted near the checkout counter as well as via verbal prompts from your cashiers.
• Be sure that your employees know how to accept contactless payments as well as how to explain the process to customers. The idea is to make the checkout experience as secure, fast and efficient as possible, and a knowledgeable staff-person can do wonders in facilitating this.
• Take a good look at your current payment services provider. They should make technology and security a priority and have the capacity to accommodate any changes or expansion that your business might require over the long haul. Simplifying your operations by consolidating your payments with a single provider allows you to reconcile all local transactions on one platform under a unified contract and reconciliation/settlement process.

Contactless technology is the underlying infrastructure that allows you to furnish an extra layer of safety and choice for your customers. It allows for fast, safe transactions from a diverse variety of sources including cards, wearable devices, and digital wallets. Now that you understand how it works and have done what it takes to adopt it, take the time to introduce it to your customers and employees so that you can fully realize all of its many benefits.