With cash transactions emerging as the least preferred mode of payment, contact-less payment systems like credit cards, debit cards, smartcards and other devices using radio-frequency identification are used for making secure payments. However, more recently the contact-less payment system is experiencing a paradigm shift as it is making way to the all-digital age with Mobile Contact-less Payment.
What is Mobile Contactless Payment?
Mobile Contactless Payments is a path-breaking payment system where smartphones equipped with Near Field Communications (NFC) technology is used mainly for performing small transactions. Here, customers using contactless payment technology in their mobile phones are allowed to pay for goods and services by simply holding their mobile device to the contactless payment terminal.
Usually given a maximum limit of 15-20 bucks, mobile contactless payment is ideal for making quick, low-value transactions like purchasing tickets in trains and buses, a quick bite or coffee at a food joint or the last minute buying of a birthday card. The privileges it brings are:
- No physical contact with the terminal.
- Customers are NOT required to enter a PIN.
- Authorization or receipts NOT required.
How does Contactless Payments Work
Tap-and-go payments on mobile phones is made possible by Near-field Communications (NFC) technology – a short-range high frequency wireless communication technology extensively used in contactless payment cards, mobile phones and passive RFID (Radio Frequency Identification Devices). Here all you have to do is simply TAP your contactless-enabled smartphone on the contactless reader on your terminal for instant and secure payment.
As such, the same technology is applicable in both contactless cards as well as Mobile Contactless Payments; and you can use them in the same places as well. The only requirement being, the retailer will need to have the technology installed and also have a special card reader at the POS. Look out for familiar logos of either MasterCard PayPass or Visa PayWave.
Mobile Contactless Payments FACTS
- Mobile Contactless Payment works great for HIGH VOLUME, LOW VALUE TRANSACTION (just a retail, fast food joints, transport systems, etc.).
- Contactless technology makes MARKETING EASIER for both you and your customers.
- Contactless payments are 25% FASTER than cash transactions.
- Contactless Payments REDUCE QUEUING TIME by over 70 percent – resulting in accommodating more customers and enhancing the shopping experience.
- Contactless Payments take just HALF A SECOND to complete transaction.
- The Average Transaction Value (ATV) for contactless payments is 2-3 times higher than cash.
- Contactless Payment is MORE SECURE than Chip & Pin transaction.
Target Market – HIGH VOLUME, LOW VALUE TRANSACTION.
Mobile Contactless payments works perfectly for businesses with high volume, low value transaction. Its implementation in smartphones bring you one step closer to replacing the currency with a revolutionary Mobile Contactless Payment system mainly used for public transportation ticketing, interactive advertising and retail.
A recent report released by Visa Europe has revealed that consumers have made 19.7 million contactless transactions across the United Kingdom in May 2014. Industry experts are optimistic that going by the fabulous response mobile contactless payment has generated in a short span of release, there will be nearly $3 billion worth of contactless mobile transactions made in 2015.
In the United Kingdom, according to a Visa Europe report, more than 37.8 million contactless cards have now been issued by UK banks. And the most encouraging part is that, this is 35 percent higher compared to the same period last year.
How SECURE is Mobile Contact-less Payments
Mobile Contact-less Payments carry the same protection as any other debit and credit card. It comes integrated with a built-in security measure and a fraud deterrent system, which after a few repeat transactions prompts you to enter your PIN to ensure that you are the genuine customer. Thereby, it takes active measures to detect fraud at a very initial stage. So, even if your mobile phone is lost or stolen, you can be protected by incurring heavy losses from any fraudulent activity. Here are a few advantages:
- Enhanced cash management
- Transactions paid into your bank account, minimizing cash handling
- Less cash to handle means lower security risks
- A full audit trail to track transactions
- No fraudulent charge backs
- Guaranteed payment for contact-less transactions processed in accordance with scheme rule
Successful Implementation of Mobile Contact-less Payment – Cash on Tap App
Mobile Contact-less payments is soon to be successfully implemented in London Underground, as Transport for London (TfL) continues its mission to move on to a faster and secure payment technology. While all pay-as-you-go travellers will enjoy the advantage of using the Tube, London Overground, DLR and trams; the users of the mobile phone network Company EE will be able to use their mobile phone to traverse around London’s train network by downloading its Cash on Tap mobile app (developed in association with MasterCard).
Cash on Tap app will be made compatible with over 500,000 customers’ mobile devices in 2014, and EE has proposed not including any additional charges for using the service to pay for travel. As such customers of EE, the pioneer in Mobile Contactless Payment are already using contactless payments using mobile phone in more than 300,000 shops across the country, including Marks & Spencer, McDonald’s, Caffè Nero, Pret A Manger and Greggs.
TfL’s path-breaking initiative of implementing contact-less mobile payments service, Cash on Tap, to Transport for London’s network, will be a promising example of how the power of technology can be harnessed for simplifying lives. Mobile Contactless Payment system will do away with the need for customers to queue for a ticket, or search through their pockets and wallets to find the right card.
Apple Pay – Redefining Contactless Payment
Apple on September 9, 2014 announced one of its most ambitious feature that can change the way secure transactions are made. Apple Pay is compatible with the new iPhone 6, iPhone 6 Plus and Apple Watch. Here, the NFC antenna in the iPhone 6 does the job when you tap it on payment verticals; while in Apple Watch you need to just double-click the button below the remarkable input device, Digital Crown and hold the face of your Apple Watch near the contactless reader.
Also what make Apple Pay a covetous payment technology is its assured security aspect. Other than Apple confirming not storing your payment card details on their servers, all transaction through Apple Pay will be performed using a unique Device Account Number that is encrypted and securely stored in a dedicated chip in iPhone and Apple Watch – also called Secure Element.
Wondering about the implications or response mobile contactless payment technology will generate? Well, let me tell you that according to a recent statement by TfL, the pilot has generated great positive response; with participants offering constructive feedback. Besides being marketed as a queue busting device and a faster way to pay for customers, Mobile contactless payment is nonetheless a GAMECHANGER in the true sense.
You too can be a part of the mobile contactless payment revolution. Be the first-mover in the industry – Build mobile payment app for your business!