Partner Article

Contactless payments - what you need to know

Emerging developments in technology are affecting our day-to-day life, from the way we work to the way we pay. No matter what your business, there is a whole new world of payment methods to explore and contactless payment is here to stay.

So what is contactless and how does it work? Andy Macauley, Chief Operating Officer of Handepay gives a helping hand towards understanding the new technology, and adapting it to suit your business.

The facts and figures

Contactless activity is constantly growing. From January to September 2013, an astounding £461.6million was spent with VISA contactless cards in the UK.

Now, there are currently 36.3million contactless enabled cards active in the UK and approximately 125 transactions a minute on VISA cards alone in Britain.

The technology began development in 2008, and has since gone from strength to strength after the success of the London Underground Oyster system, which uses contactless payment to debit amounts from pre-loaded cards. The benefits were threefold; it drove down costs for the operator, led to fewer cases of fraud and provided the customer with faster journeys.

How does it work?

Contactless payment uses a short-range wireless system called Near Field Communications (NFC). Debit and credit chip cards are fitted with an antenna that enable them to communicate with devices at a radius of up to five centimeters. Customers pass their cards close to a contactless enabled payment machine at the point of sale to register their payment.

Contactless terminals ensure that only one payment is taken from each card per transaction. In order to put a second payment through, the card has to be removed from the wireless range and the merchant has to initiate the next transaction. What’s more, if the payment terminal senses more than one card in the NFC range, the transaction is rejected.

The benefits

‘Tap and go’ transactions take a few seconds, meaning that customers have a quick and painless shopping experience without having to queue. What’s more, you have more time to engage with customers, meaning that they are more likely to return.

Who’s on board?

There will be at least one if not more businesses on your high street using contactless payments. High street giants including Marks and Spencer, Costa and Boots are all early adopters of the technology, as well as smaller scale firms and many more signing up to smart payments.

* Andy Macauley is Chief Operating Officer at merchant services company Handepay, http://www.handepay.co.uk/news/understanding-contactless-payments?utm_source=ENTER_SOURCE_WEBSITE_ETC&utm_medium=Web-Articles&utm_campaign=Contactless-Payment-Whitepaper

This was posted in Bdaily's Members' News section by Handepay .