£2.5 billion was spent on contactless cards in the first half of 2015, underlining consumers’ unstoppable appetite for ‘tap and go’ technology.
With the contactless spending limit rising to £30 this month, the revenue opportunity for retailers has increased dramatically - yet not all companies appreciate the business value of embracing such payments.
If you’re still sitting on the fence, here are Vodat’s top tips for enhancing the customer experience through contactless, to support your adoption of the technology.
1 - Increase checkout speed
Tap and go payments take less time than entering a PIN number or fumbling for change. Speeding up individual transactions will lead to faster moving queues, particularly during peak trading periods.
2 - Improve convenience
Time-poor shoppers want a range of payments options, so they can select the one most suitable at any given moment. Contactless adds another choice at the checkout, so they can dictate their own transactional journey. It also removes the constraints of paying in cash.
3 - Reduce abandoned sales
The combination of quicker queues and greater convenience will drive down basket abandonment, as you’re removing two key barriers to purchase.
4 - Support upselling
With contactless, consumers aren’t limited to the change in their pocket, which creates greater leverage for upselling. Particularly at the checkout, promoting low value items will encourage shoppers to add to their basket, increasing average transaction values.
5 - Streamline operational costs
Contactless not only reduces the cost of cash handling; it decreases the risk of cash shrinkage, due to theft and fraud. To scale down the time and resources involved in receipt printing, you can even introduce a ‘receipts on request’ policy.
6 – Moderate risk
Encouraging customers to embrace card payments creates a stronger audit trail. Security risks associated with contactless transactions are also managed by the card or device, removing merchant responsibility in the event of a breach.
7 - Open the gateway for emerging payments technologies
The majority of contactless payment devices are also NFC-compatible, meaning they can accept emerging transactional technologies such as Apple Pay. By nurturing the use of contactless among current customers, you lay the foundations for mobile wallet adoption further down the line.
However, while the business benefits of tap and go payments are clear, there are two essential things to remember when creating a successful contactless-driven customer experience.
The first is software related; more than 200,000 retail and hospitality merchants across the UK need to implement a software upgrade in order to process £30 payments. However, most consumers are unaware of this, and therefore will expect universal acceptance of tap and go transactions up to £30.
The second relates to security; although, as we mentioned, contactless card payments are more secure than cash in many ways, merchants still need to safeguard their payment network.
Vodat International’s Unified Payment Service reduces the cost and complexity of payment security, at the same time as lowering retailers’ scope for PCI compliance. The solution provides a fast, secure interface for all EFT transactions generated through the store, managed through our own resilient network.