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Getting to grips with contactless

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Contactless payments are becoming increasingly popular and a report published by eDigitalResearch in June 2014 showed the amount of consumers aware of the technology had risen to 58 per cent, up from just 15 per cent in 2012.

It was also found that more than half (55 per cent) of customers own a contactless payment card of some type, while nine per cent of the UK population possess a smartphone with near field communication technology, which can be used to make contactless payments.

How does it work'

Contactless debit or credit cards allow consumers to make purchases of up to £20 without the need to enter their PIN. They work because each card contains a small chip that emits radio waves and when it is held within a few centimetres of a payment terminal, the signal is received and used to process the transaction.


The technology is similar to that utilised in the Oyster card system on the London Underground, which facilitates almost-instant debits from pre-paid travel balances in order to speed up journeys for transport operators and passengers commuting on rail and bus services in the capital.


As well as the transaction value limit of £20, there is also a restriction on the number of consecutive purchases that can be made using contactless payments before a PIN must be entered – currently five. This is to ensure the security of the transactions and prevent cards that have been stolen or fallen into the wrong hands running up significant bills.


Payments are processed using the same technology as chip and PIN, so there is no greater risk of fraud for a business utilising contactless technology, but it is understandable that some people have concerns.

There appears to be a worry among consumers that they may accidentally make purchases if they pass a terminal and have an equipped card in their pocket or a bag they may be carrying. However, each payment needs human authorisation from the retailer, so it is virtually impossible for these instances to occur. Also, it is only possible for contactless to take one payment at a time, allaying any fears that all cards within the vicinity will be charged during a payment.

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How do I get it'


If you’re looking for a merchant service provider and a card terminal, there seems to be very little in the way of arguments against selecting one that is already equipped with contactless technology.

The speed and ease of these transactions for the customer is a considerable factor and with the eDigitalResearch report showing 57 per cent of consumers expecting to make a contactless payment within the next 12 months, it may well be a question of whether businesses can afford to hold off on embracing the technology.


Indeed, the costs related to contactless payments are lower than traditional chip and PIN, making this perfect for low-value transactions. As these are also much quicker to process, terminals can also be set to refrain from printing receipts unless the customer specifically requests one – potentially leading to further cost savings in terms of till roll expenses.


What can it do for my business'


As well as the aforementioned benefits, the ability to accept contactless payments helps to future-proof your business.


The £20 transaction limit has been placed under review and may well be lifted in the future, allowing for more expensive purchases to be completed in this manner. Of course, there are likely to be further anti-fraud measures implemented if this is the case.


It is also widely expected that a range of products and gadgets will be introduced to the market in the coming years that implement contactless technologies – including e-wallets and smart watches.



With these payments becoming more and more common, can your business really afford not to offer this capability, particularly if it proves to be the difference between securing and losing out on sales'