Over the past decade, both NFC and RFID technologies have revolutionized the world of payments by making them faster and contactless. For the uninitiated, when we use a tap and go credit card or payment card, we are making a quick contactless payment. These contactless cards contain a chip that uses either Radio Frequency Identification (RFID) or Near Field Communication (NFC) to communicate with the card reader.
In both cases, the card is powered when it is in the vicinity of the reader and is then able to communicate with the reader using a secure protocol. Card manufacturers such as Cardzgroup have long been making use of these technologies to produce contactless cards.
NFC is also integrated on most new smartphones making it possible for users to make contactless payments using their phones.
The convenience offered by this payment solution makes it a popular choice in a wide variety of applications like credit cards, transport cards, and mobile wallet apps. Most consumers enjoy this convenient method of making transactions and there is a gradual increase in the use of mobile wallet apps as well as contactless cards.
According to this press release by MasterCard, half of the payments in Europe are already contactless. A shift to a cashless as well as wallet free society thus does not seem entirely impossible. We will now take a look at how this shift impacts processes and operations for small retail businesses and stores.
Traditionally it was not uncommon to see a queue at small mom-and-pop stores or convenience stores or cafes which are usually around the corner and hence easy to access for any consumer. Such stores usually have only one manned counter where consumers make payments against their purchases.
Contactless payments using tap and go technology can speed up the process of making payments at such stores and café’s reducing the queues of waiting people. This can directly impact customer service and retention at these stores by improving the overall customer experience and convenience. A long queue during a busy day can be a sure game changer for many consumers making them turn away from the store. Stores can also service more customers in the same amount of time thereby increasing their productivity and efficiency.
Besides the increased speed and convenience, supporting contactless payments can help stores reduce reliance on cash and the need for manual bookkeeping and cash management processes. The fees involved in contactless payments may also be less for small value transactions resulting in savings for the business.
A merchant wanting to set up a contactless infrastructure may have multiple service options available. Different countries have different contactless payment options which usually include global brands like Visa and MasterCard as well as domestic brands. Apple Pay and Samsung Pay are also widely available.
Merchants would want to analyze what is popular among their customers and ensure that the specific services are available at POS terminals in their stores or other retail businesses. All said and done, the aim is to make life easy for customers so that they keep coming back, which would help in the growth of the business.