Can the US go from lagger to leader in contactless payments?

By Gary Prince, Chief Strategy Officer at SimplyPayMe,

Contactless payment methods have swept across Europe over the past few years and are beloved for their ease of use. While Europe quickly adapted to this new payment method, the US hugely lagged in reform when it came to contactless payments.

Despite this, the US is moving towards using contactless payments more widely, with approximately 51% of American adults ‘now using at least one form of contactless payment.‘

Likely, this figure will only increase as contactless debit and credit cards are only the beginning of the contactless payment options available. As their popularity rises, it’s important to understand the pros and cons of this payment method to see if it suits you.

Advantages of contactless payment types?

Contactless payment methods have their pros and cons, whether it’s a contactless card, mobile wallet, or QR code payment.

The main advantage of all contactless payment methods is speed. Using contactless payments hugely increases the speed of purchases without having to wait for a card to be inserted or swiped and then a PIN entered.

Another benefit of all contactless payments, particularly in the era of COVID-19, is that they reduce physical contact. With a contactless payment, there is no need to touch the keypad with your fingers to insert a PIN or even handle notes or coins, making this method more hygienic than others.

Contactless payment methods also offer increased flexibility. With contactless wallets, there’s no need to carry around a physical wallet or purse that could potentially be lost or stolen. With QR code payments, customers can pay entirely from their phones.

Contactless payment disadvantages easily overcome

The main disadvantage of contactless payments is the concern around security and attempted fraud if a card is stolen or lost. Unfortunately, there is no real safeguard around this other than immediately contacting your bank and declaring it lost and having the card and any attempted purchases frozen.

This has led to distrust, particularly from older generations, who do not feel comfortable with owning a card that could be used by anyone should it be lost or stolen.

At this time, there is also limited availability for contactless payments abroad. Some contactless payments and mobile wallets are not accepted ab internationally road, sometimes making travel more difficult.

There are also limits on the amount you can spend on a contactless card. For example, the UK spending limit of £100 is typically enough to get a user through low day-to-day spending, but the card cannot be used to purchase more expensive goods.

Why have contactless payment methods gained popularity?

Contactless payment methods have proved popular due to the advantages mentioned. In addition, users are particularly fond of the added speed and ease of use that contactless payment methods give them.

Contactless payments operate in line with a societal shift towards digitalization, and for many, this new way of paying makes shopping an easier and smoother experience.

How can businesses and customers benefit from contactless payment methods?

Particularly since the outbreak of COVID-19, businesses can hugely benefit from offering contactless payment methods. Customers want to be as safe as possible during their purchases, and offering a contact-free payment service is a significant advantage to have on your side.

Not only does contactless payment keep the customer safe, but it also will ensure the protection of your employees and keep them from having to handle keypads or notes and coins that have been relentlessly touched.

As well as being one of the safer payment methods, the entire purchasing process is sped up by offering contactless payments. For example, QR code payments take a second for the customer to set up and pay. With transaction time hugely decreased, your business can spend that time focusing on other duties that will improve operational efficiency.

All these benefits are available for businesses at no extra cost to themselves. Setting up contactless payments costs no more than the traditional card transaction, so companies don’t have to be concerned about any hidden or additional fees.

Contactless payments are the future of customer transactions. As this payment method grows internationally, we expect to see more businesses offer contactless payment options for their customers.

Gary Prince is Chief Strategy Officer and Vice Chairman at global payments leader SimplyPayMe. He has more than 30 years experience, previously serving as founder and CEO of Astus Munia Consilium Ltd, Managing Director of VibePay, VP mobile payments at Barclays and other leadership roles in the payments industry.