Contactless payments are becoming a popular method of payment for consumers. They eliminate the need to swipe and insert cards or enter PINs. It is quick and convenient, and is a great alternative to cash or mobile wallets. The technology is rapidly growing and businesses need to understand how it functions, what its advantages are, and how they can utilize it.
When a consumer uses their contactless card, or eWallet, to pay for purchases, the device and point of sale terminal communicate using short-term radio waves. A cryptographic code is sent, and if the transaction meets certain requirements (e.g. the card is authenticated and the funds are in the account) the merchant’s POS terminal will trigger a transaction.
Once the transaction is complete Once the transaction is complete, the POS terminal will notify the cardholder that the transaction was accepted, typically with an green light, checkmark or a beep. In some instances, a POS terminal will also require the cardholder to sign an official signature to authorize a contactless transaction.
In addition to their convenience contactless cards offer more security than traditional magnetic stripe cards as the information is securely encoded on a microchip. The information transmitted to a POS Terminal is encrypted. This makes it almost impossible for thieves and hackers to steal the data.
For these reasons, contactless payment is a powerful tool for businesses of all sizes. With the right software merchants can now accept contactless payments made with credit card as well as online ACH on a single platform that they can manage with their back-office accounting software using advanced plugins.
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