Boost your business with contactless payment

8/12/2019 Boost your business with contactless payment

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CONTACTLESS PAYMENTSEverything you need to know for your business


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Everything you need toknow about contactlesspayment

Rapid developments in technology are changing the way we

live, work, learn, socialise and especially the way we pay.

Contactless payment is booming. It takes less than a second to

process a transaction, making it perfect for our fast paced liveswhere were always on-the-go, with no time to hang around.

There are 36.3million contactless enabled cards in circulation

in the UK and an estimated 125 transactions a minute on VISA

cards alone in Britain. Contactless activity is growing at an

average of 22 per cent every quarter. In the year to September

2013, an astonishing 461.6million was spent with VISA

contactless cards in the UK.

Business owners love it because it speeds

up transaction times, cuts down on queuesand reduces sales lost with people deciding

theyre too busy to wait.

Major high street names such as Marks & Spencer, Co-Op,

Waitrose, Post Office, Boots, Costa, Greggs, McDonalds,

Wilkinsons, WH Smith, Wetherspoons and even The National

Trust are among the organisations that have adopted the

technology - with 164,000 contactless terminals in operation

in the UK, according to industry body the UK Cards Association.

There will be at least one business on your high street using

contactless technology as this next step in the smart payments

journey becomes more commonplace. And of course, whilst

harder to measure, take-up in the independent business sector is

increasing too. In fact many businesses already have contactless

enabled payment terminals, but are unaware of the additional

capabilities they hold.

So, lets dive in to the world of Tap And Go

to see how you and your customers can get

the most out of this technology.

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Who supports it?

Banks who have issued contactless cards include Barclays,

NatWest, HSBC, Capital One, Co-operative Bank, Lloyds,

MBNA, RBS and Newcastle Building Society. MasterCard

branded cards use a system called PayPass while Visa has

its own version called PayWave.

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What is contactless?

Contactless payment uses a short range wireless system calledNear Field Communications (NFC). Debit and credit chip cards

are fitted with an antenna that enable them to communicate

with devices at a radius of up to five centimeters. Cardholders

pass their cards close to a contactless enabled payment

machine at the point of sale to register their payment.

Originally developed back in 2008, its use became more

widespread after the huge success of the London Underground

Oyster system, which uses contactless payment to debit

amounts from pre-loaded cards. This drove down costs for the

operator, led to fewer cases of fraud and provided the public

with quicker journey times.

How does it work?Following the success of Oyster in London, contactless was seen

as the solution to faster payments for businesses and the public

across all sectors, particularly those with low value, frequent

transactions such as newsagents, bakeries, convenience stores,

chemists, takeaways and bars.

While the main benefit of contactless is to speed up theprocess by removing the need for the customer to verify every

transaction, there are still checks in place. The cardholder has a

ceiling on their card of 20 per transaction and cannot go more

than five contactless transactions without being prompted to

enter their PIN to confirm identity.

Contactless terminals are programmed so that only one

payment from one card for one transaction can go through at

any time. In order to put a second payment through, the card

has to be removed from the NFC range and a new transaction

has to be initiated. In addition, if the payment terminal sensesmore than one card in the NFC range, the transaction is rejected.


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Is it safe for my business

and my customers?

In a word, yes.According to a survey by Retail Week magazine in July last year,82 per cent of the public still had security fears over contactlesspayment. Stories abound of people unwittingly paying for itemsvia the card thats in their purse or inside their handbag thatthey had just rested near the payment machine. And worse, ofpeople having no idea theyve even made a transaction untilthey see it on their statement a month later.

However, such instances are extremely isolated and are beingput down to errors at the point of sale by the business andcardholder as these cards like any other do not just takepayments automatically. In a typical transaction, the salesassistant enters the amount first before the card is presentedand the contactless card needs to be less than 5cms away toregister.

Businesses wont be exposed to any greater

risk of fraud as contactless cards use the

same high level technology thats behindchip and PIN.

Specific anti-collision software is also installed on contactless-enabled terminals if a reader detects two cards, the merchantis asked to clarify with the cardholder which one to make thepayment from.

Cardholders can also improve the safety and security of theircards by always removing them from their purse or wallet

before presenting it to a contactless reader.


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How susceptible are these

cards to fraud?Retailers have the same protection against fraud as they do withchip and PIN transactions. And just like any other card, as soon

as it is reported missing or stolen its blocked and if reasonable

steps have been taken to ensure its safety, the cardholder wont

be liable for any activity on the card after it is reported.

From the cardholders viewpoint, if thieves stole a card, they

would only be able to make a handful of 20 or less purchases

before being required to enter a PIN.

According to Financial Fraud Action UK, thetotal amount of UK fraud reported from

contactless cards in 2012 was 13,700. To

put this into context, 216million of fraud

was reported on debit and credit cards in

the UK.

Earlier this year, researchers at the University of Surrey claimed

to have invented technology that allowed them to read the

details of all cards being used at up to half a metre away from acontactless terminal. However, the UK Cards Association insists

that no useable information would be able to be picked up,

therefore fraud is highly unlikely.

A mobile application has also been developed by Newcastle

University that claims to be able to read the name, number and

expiry date from a contactless card. This could allow fraudsters

to rack up purchases on websites that do not ask for the three-

digit security code before completing transactions. However,

while technically possible, the effort required is deemed to far

outweigh the possible return.

According to the website contactless.info, setup by the participating bodies in contactless

technology, the security built into the chip

on a card means that any data intercepted

would not work if someone tried to use it

again.

The card generates a unique cryptogram

for each transaction (based on the secret

cryptographic keys in the chip, the

transaction counter, and a random number

produced by the terminal) that is used to

validate the data.


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Customer case study

How does it work in practice? Heres the experience of oneretailer, Hasan Akis, of Tarves Food and Wine in south east

London.

We went contactless about six months

ago and we wouldnt be without it now.

Being able to take payments this way has

benefited our business dramatically with

payments of 20 or less taking less than a

second.

This, in turn, reduces queuing time and allows us to serve more

customers. At busy times, the difference in store has been

noticeable and theres less frustration among customers and

staff. Being able to spend more than just the change in their

pockets has also led to an increase in the average spend of our

customers too.

Some customers didnt understand at first that their cards

were enabled with contactless technology. But wed made sure

all of our staff had been trained in what it was all about and

how it worked so we were able to guide customers through theprocess.

A few customers have asked about how secure contactless

payments are and we have been able to reassure them that

their transaction is as safe as a regular chip and PIN transaction.

This is such a quick and easy process that its clearly the next

step in electronic payments and before long everyone will be

using it.


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What else can be done with

a contactless terminal?The terminals are able to do everything a chip and PIN terminal

can. If you are in a business where tips are common, these

gratuities can be added, although they need to be added

up beforehand so one amount is put through the terminal.

Contactless transactions cannot be performed for cashback or

refunds. Receipts are usually not automatically issued, but can

be given to cardholders on request.

Is it more expensive?Contactless transactions on debit cards attract lower charges

for businesses than chip and PIN transactions, which make

them ideal for low value sales. For credit cards its the same

rate as chip and PIN i.e. a percentage charge.

Businesses may need a new payment terminal when deciding to

take contactless payments. This is generally no more expensive

than a traditional chip and PIN terminal.

Contactless machines are available with colour screens and

there will be savings to be made on paper rolls as the machinesonly issue merchant receipts (the cardholder can request a

receipt), which is environmentally friendly as well as quicker to

process.

In addition, all staff will need to be trained in how to operate

the terminal and how the contactless process works, so they are

able to advise cardholders and avoid problems. Display material

at point of sale will also raise awareness that the service is now

on offer.

THREE STEPS TO REMEMBER

Look:Make sure the contactless sign is clearly

displayed around your point of sale.1

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Future developmentsIts not just about cards, there are a range of future developments

using the same technology to facilitate payment transactions,

including contactless enabled smartphones, wrist bands and

watches all supporting e-wallets containing a customers virtual

card. The 20 transaction limit is also being reviewed and the

industry is developing contactless higher value payments

which will enable payments of more than 20 to be made.

Further anti-fraud measures will go hand in hand with such

developments to safeguard the integrity of contactless.

Why should I be offering

contactless payment to my

customers?Whatever kind of business you are, the number one rule is

to listen to what your customers want. Having the option to

offer contactless payment is clear proof that you are keeping

up with the way public spending habits are changing and not

missing out on sales. Despite the hype, the risk for businesses

and cardholders is no different to chip and PIN transactions.

We know that there are also business owners who prefer to

engage their customers and therefore dont want a quick

transaction. In these instances, contactless would provide a new

tech option that leaves more time to talk and engage as the

payment process is over in the blink of an eye.

With so many cards in circulation and more being issued all the

time, this will soon be the way customers expectto pay. So can

you afford to ignore contactless?

The speed of transaction is theobvious benefit to the cardholder.Many business owners see theadvantage of this too, with quicktap and go payments helping toreduce queues at peak times and getmore customers through the door.


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Find out moreWe hope you found this information useful, however we

understand that the payments industry is complicated, so ifyoud like to talk to Handepay about your business needs and

how contactless technology can benefit you, please get in touch

by emailing [email protected] call 0800 377 7382.

Handepay has also produced a guide to getting started with

card payments, its free to download and is available from

www.handepay.co.uk/accepting-card-payments

Documents

Boost your business with contactless payment