Contactless Payment Table of Contents
What is contactless payment? This is a question that many people have asked in one way or another, and the answers they give can be somewhat confusing. Contactless payment methods are credit cards, debit cards, smart cards, mini-drivers, key fobs and other hand-held devices, which employ near field communications or RFID for sending secure, automated, or synchronized information between the hardware and software on either end. These devices communicate via the radio waves transmitted by the device to the receiver. What this means is that when a customer swipes their credit card or debit card at a participating store, the device sends a signal that is digitally encoded and then receives a corresponding signal back from the receiver. There are different ways that this information is sent, but the end result is the same: secure, automated, and synchronized payment transactions.
What makes contactless cards so different from traditional Magnetic Stripe or Neon Tag payments is that instead of a piece of plastic being used as a payment device, you are able to conduct many different types of payments with the same piece of hardware. The most common way that people make purchases using these items is by swiping them or holding them above the reader, and reading the magnetic stripes or colored neon labels. You can also opt to hold the items on your finger, which will allow you to make a tax payment. Many people choose this method because it is more comfortable than the older forms of payment.
In addition to being comfortable and convenient, this type of magnetic-stripe and contactless transaction offers a number of security measures. Because this technology only allows transactions with items that are physically within the card's magnetic stripe or colored area, or within a specific range from each other, there is little opportunity for fraud or for stealing. The magnetic fields that these devices emit both enable and interfere with secure transactions, and these fields can remain active even when the item in question is turned off or transferred to a new location. This measure, along with the reduced possibility of theft, makes these cards an excellent choice when it comes to online and mobile purchases. In fact, many major companies that offer this type of payment service do so via their websites, which makes it easy for you to complete all of your payments online and even at any location with an Internet connection.
While a lot of people are wary of new technologies, especially with regards to technology that 'scams' them out of money, the concept of contactless payments is starting to get a bit of a stigma. Although the most commonly associated disadvantage associated with contactless payments is that they are a bit more expensive to process than traditional credit cards, they can offer a wide range of benefits as well. If used correctly, contactless transactions offer businesses an unparalleled level of flexibility when it comes to processing card payments and debit card transactions at a much lower cost than most methods currently available. Some of the best advantages of contactless payments include: faster transactions, more efficient billing, no fraud, no need for pin systems, no paper work, no need for multiple phone calls, and even no need for bulky or annoying credit card machines. If you are planning on using a contactless payment system in your business, there are a few things that you will want to take into consideration before making your purchase.
First of all, it's important to know exactly how a contactless transaction works in order to be able to better evaluate it. Basically, a contactless transaction occurs when you swipe a card, write something on it, and then insert it into a machine that automatically processes the information. The machine then emits a charge, which is absorbed by the bank. The only thing that you have to do is decide whether you want to pay for this transaction via credit card or debit card. This means that you can have a large variety of different ways to pay for your transactions.
Now, let's take a look at some of the benefits that you will receive by using contactless systems. First, it eliminates the need for writing any bills, since you are not spending money on something that you are not actually purchasing. Also, by eliminating the need for a card reader, it makes transactions very secure. Finally, since there are no wires or cords involved, these types of transactions are very safe because you don't risk having your transactions picked up by fraudsters. In short, using this type of technology is a smart move for any business that needs to process transactions quickly and easily.
This technology involves using a transmitter on the receiver's body to transfer funds directly from the transmitter to the recipient's card. Contactless payment allows purchases to be taken without having to touch a keypad or physically handing over your credit or debit card to someone to make a purchase. A traditional contact-less payment can only be made via a cell phone on smart phones or watches, or via credit or debit cards which have integrated contactless technology. A wireless phone will usually allow you to make contactless payments, but it is not widely available in most cases due to transmission latency which results in poor quality images for a contactless payment.
Some major banks in the US like Bank of America and Chase have been pioneers in implementing contactless payment technology in their retail stores in the US. In South Korea, most major banks allow their customers the ability to make automatic payments via their mobile phones. There are also a number of smaller restaurants and gas stations in the Korean region that also use this technology. Most of the gas stations accept top-end cards from major credit card companies like Visa and MasterCard, which allow the gas station to process transactions immediately and has dramatically reduced the amount of processing that the customer needs to do when they use these cards to make purchases at their local gas station.
The main benefit of this type of transaction is that you can complete all your transactions without having to give someone permission to process a transaction with you. If you're using a contactless card or app to pay for a transaction, the transaction is completed directly between your computer and the merchant's server, without anyone getting in between. This eliminates the need for an intermediary and therefore lowers transaction fees. Many merchants and restaurants use this type of service to eliminate the need for employees to process credit and debit card transactions at their establishments. There is no need to have separate lines of credit to pay for your purchases, and transactions are processed immediately. Because there is no need to wait for authorization, there is also less risk of charge backs, which can lead to loss of money and reputation among your customers.
Examples of Contactless Payment Devices are watches, key fobs and fitness trackers, among others. Eventually, all such devices will have in built camera capabilities for facial recognition. Currently the technology is available, however, not all devices have this capability. Many and product key chains already do, therefore, if your business does not currently offer a way for customers to pay with a plastic card, you may wish to consider adding a small product key chain device to your marketing arsenal. The small cameras that will be able to record the payment information of customers in stores or other businesses, should be able to be attached to the key chains through simple means, such as Velcro straps. Other options will include an adhesive strip or a magnetic strip to which you can affix the tiny cameras that are used for facial recognition.
More recent examples of Contactless Payments Devices are RFID chips. They are already in use at banks and restaurants, and eventually they will spread to retail outlets as well. The RFID chip is able to store data and transmit it wirelessly from the point of sale location, to a central database, which can then be accessed by software applications on computers, smart phones or other handheld devices. This technology already has some excellent potential, as it is capable of storing and transmitting data in a manner which does not compromise the security of either the customer's credit card information or payment information stored in a database at a retailer's or restaurant's computer.
An example of a Contactless Payment Device would be a 'tap and go' device in a restaurant that could allow a customer to order off a service station or quick service area, without having to make a purchase first. The customer would simply make a 'say now' motion with his or her finger, indicating that they want to place an order. Using an infrared scan of the hand, the system would recognize that movement and produce an electronic signal, which the device then sends to the central database, identifying the particular product that is being requested. Such a system could be incredibly useful for a wide variety of applications, covering everything from employee scheduling to retail Point of Sale applications, as well as making it much easier for employees to perform their duties more efficiently.
Scroll down to read our indepth Payment Platforms guide. What you should know, Payment Platforms features, price plans and support. Pros and Cons of Payment Platforms as a payment gateway, everything is explained below.
Spreedly is a software company that specialises in payment-gateway software for small to enterprise level businesses.
Spreedly is listed as the best payment-gateway software related to Payment Platforms. Spreedly was founded in 2008 in Durham, NC and currently has over 79 employees registered on Linkedin.