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Benefits of Contactless Payments

Guest post by: Tariq Mohammed

Article Overview: People around the world today are using smart cards for debit and credit payments. Contactless payment applications are gaining momentum as new contactless devices are being introduced like Secure Contactless Tokens, NFC Stickers etc.

Benefits of Contactless Payments

People around the world today are using smart cards for debit and credit payments. Contactless payment applications are gaining momentum as new contactless devices are being introduced like Secure Contactless Tokens, NFC Stickers etc. In coming years, consumers will have a strong preference for contactless payment technology and merchants will use contactless payments to reduce waiting times, satisfy customers and boost sales of their business.

A U.S.-based independent research firm expects point of sale contactless payment applications to grow 19% annually by 2014. The US has the largest share of contactless payments, with most of the major financial entities offering the services to their customers. However, a vast number of financial institutions in Europe, Middle-East and Africa are yet to introduce contactless payment services. According to Frost & Sullivan, demand for contactless smart cards in the Asia-Pacific (APAC) region is expected to take off in 2012. This untapped market across different regions has immense potential for a constant and massive stream of extra revenue for service providers.

Fast and secure contactless payments appeals to consumers with wide ranging applications from mass transit systems to micro payments. At checkout lanes, consumers with contactless cards and other contactless devices can choose how to pay. They can use the conventional payment card contact process and print a receipt to sign, or they can save time by simply waving the card within close proximity to a contactless reader to finalize the transaction in one efficient step. Some of the benefits which make contactless payments attractive to consumers are :-

· Speed and Convenience - Contactless payment can reduce individual transaction times by 10 to 15 seconds, as per market research firm Tower Group. In busy retail environments, this speed of service is very attractive. The consumer can initiate a contactless payment transaction with a tap or a wave and go. As a result the transaction is very fast as compared to inserting a card in the reader and waiting to sign an authorization receipt

· Alternative to cash and cards – Contactless Payment acts as an alternative to cash, and if the contactless form factor is a sticker attached to a personal item like a mobile, then it reduces the need to even carry a wallet at all.

· Security – Dynamically generated codes, high encryption standards and biometrics can be employed in the security mechanisms for the contactless devices.

Attributes like speed, efficiency and security gets associated with the contactless solution, which are the primary factors in micropayments, predominantly seen in places such as fast food restaurants, mass transit ticketing, grocery stores etc. Fast and secure contactless payments are appealing to merchants as well due to -

· Faster Transactions – Contactless payment technology reduces transaction time leading to high revenues and customer satisfaction

· Customer Loyalty – Contactless payment can deepen brand relationship with customer. The benefits of convenience and speed create more satisfied customers who spend more and are more likely to come back as a loyal customer

· Operational efficiency – Consumers spend less time at the time of contactless transactions, which means fewer cashiers are needed to handle the same volume of transactions during peak periods.

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Article Tags: Contactless, Contactless Payment, Contactless Payment Company, Contactless Payment Services, Contactless payments, contactless solution, Online Payment, Smart Cards



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