Are Contactless Payments Right for Your Business?

Almost every EFTPOS machine in New Zealand is capable of accepting contactless payments, and that’s for good reason. Over 440 million transactions take place via an EFTPOS machine every year in New Zealand, making our country one of the biggest users of the payment platform in the entire world. A natural extension of the EFTPOS machine is the contactless payment method, which 75% of Kiwis find fast, convenient and secure  to use.

As a business owner, it’s your choice to enable contactless payments on your EFTPOS terminal, and you should have all the necessary information before you make this choice.

  1. How will it affect your business?
  2. Your customer’s experience? 
  3. How does it work? 
  4. Is it as secure as a regular card payment? 
We answer all these questions in this blog post, so read on…

How Do Contactless Payments Work?

The goal of modern EFTPOS technology is to create a frictionless interaction at the point of checkout for both customer and merchant . Technologies like Visa’s PayWave and ApplePay are designed to enable a convenient form of payment, creating that quick and easy “tap and go” experience that customers enjoy. For many, there is a concern about the safety of these kinds of transactions, but we are here to allay these concerns with cold hard facts.

Near-Field Communication

Contactless payments work through a set of communication protocols called “Near-Field Communication” or NFC. You can think of the card or NFC-enabled smartphone as an NFC “tag”, and the EFTPOS machine as the NFC “reader”. These two elements communicate with each other, transmitting the stored card data from the tag to the reader as soon as they come close to each other. The technology is based on the same idea as RFID (radio-frequency identification) tags such as hotel key cards.

Secure Payments

This form of payment is far more secure than most people may assume. NFC-enabled cards and apps are more encrypted than standard EFTPOS cards, so your data is less likely to be stolen or swiped while paying for something. A lot of people think that it would be easier to “clone” these cards because you don’t have to get close to access their data, but this is a common misconception. Thanks to a proximity feature that strictly limits operating distance, you can only access the data from a very close range, effectively removing the risk of remote hacking.

Additionally, any transaction over $80 requires the customer to input their PIN, so even if the card was taken, no major transactions could be performed before the customer noticed.

The Contactless Payments Checklist

This kind of payment method would work for almost any business, but it doesn’t hurt to check if it’s the right fit! Compare your business or store to the checklist below, and if you decide that you want to add contactless payments to your company’s repertoire, you can give us a call.

1. You have an EFTPOS machine.

First thing’s first: you need an EFTPOS machine, whether that’s an integrated, interfaced, stand-alone  or a mobile EFTPOS setup. Beyond that, you need to have a machine that can accept contactless payments. Almost all terminals in NZ are contactless capable and  already contain an NFC reader, so you’re good to go.

2. You need a fast turnover.

If your store encounters some very busy hours, installing a frictionless terminal is one of the best ways to speed those queues along. Don’t have your customers walking away at the sight of long lines.

3. You accept credit cards.

Both credit card and contactless payments incur a small merchant services fee. The fees you pay won’t be affected too much if a large proportion of your customers already pay using a credit card, and you may actually find yourself saving some money in fees, but you will need to talk to your bank about that. Plus, giving your customers the added convenience of contactless payments will positively affect your bottom-line and do more than just offset the fees.

4. Your transaction values are typically under $80.

If your business has a good proportion of products that cost under $80, then contactless is a smart choice to make transactions fast and painless.

Keep in mind that PIN-less transactions are only enabled for payments under $80, so if you are a dealership or somewhere with high-value transactions your clients will still need to input their PINs for verification when paying. This doesn’t mean your business won’t benefit from a contactless-enabled terminal, but if your products cost fall under the $80 mark then you’re likely to appreciate the conveniences afforded by investing in this kind of terminal.

There you have it! A breakdown of contactless payments, and the ways they can benefit you as a business owner.

5. Elevate your business.

Talk to us today about creating a friction-less customer experience in your store. If you have any queries, our friendly team is always standing by, and we have a large variety of EFTPOS terminals for you to choose from click here to send in your inquiry.