Contactless Payment Solutions: Reinventing the Way People Pay
The new digital behaviors that have emerged in the past two years are here to stay. E-commerce, m-commerce, and contactless payments have significantly increased during this period. And in the coming years, this new consumer behavior trend is expected to continue.
Consumers and merchants worldwide are already aware of the advantages of digital payments. Having their own “wallet” available on their phone or wearable devices makes payments faster, safer, and more convenient.
What is contactless payment and how does it work?
Contactless payment is a technology based on the global EMV security protocol (Europay, Mastercard, and Visa). NFC (Near Field Communication) technology enables payments to be made without the need to touch anything.
This technology can be implemented in payment cards, mobile phones, and wearable devices. A small short-range antenna installed on the device makes the payment when brought close to the terminal.
Why are contactless payment solutions important for the payment industry?
Here are some reasons why contactless payments are important for the payment industry strategy and regulatory bodies.
Competing with cash
In many countries, cash is still the most commonly used payment method. However, because it is inefficient for new consumer behaviors, its use is expensive and fuels illegal markets.
Contactless is a viable financial flow tool that is more convenient, faster, and safer than cash. This makes the technology strategic for governments, banks, payment providers, and merchants.
An alternative for businesses with high payment volumes
In public transportation, lottery retailers, convenience stores, parking lots, cafés, and other businesses with high payment volumes and low-value transactions, the use of cash is deeply ingrained. In these businesses, contactless payments allow merchants to serve their customers faster, reduce lines, and eliminate risks and costs associated with cash handling.
Improves the consumer experience
For consumers, contactless payments mean faster, more convenient, and safer transactions. There’s no longer a need to open a wallet and count coins. Especially in high-traffic locations (concerts, fast food, vending machines), contactless technology provides a better shopping experience for consumers.
Easier customer loyalty
Card usage for payments is one of the most important performance indicators of an account. A more engaged and satisfied customer with their financial institution tends to be more profitable. Contactless technology offers customers more opportunities to use their card as a payment method, turning them into loyal customers.
Paves the way for other innovations
The acceptance of contactless card payments has enabled the development of other forms of transactions, such as smartphones and wearable devices, which, when integrated with the card, provide greater convenience and security for purchases.
Interoperable platform for open participation and regulatory oversight
One of the great benefits of contactless payments is that any licensed bank or payment provider can participate as an issuer, acquirer, or both. This allows for more participants, as it is designed to encourage competition and regulatory oversight by governments.
Provides more payment security
All contactless transactions are protected by highly secure encryption technology. Additionally, tokenization technology ensures an extra layer of security for transactions.
Card tokenization solutions for contactless payments Digital transformation has changed the way companies interact with their customers. For over 30 years, our commitment has been to ensure security for financial institutions in Latin America through electronic payment solutions.
Want to learn more about our solutions and how they contribute to the security of financial institutions? Contact us!
