Contactless payments are transforming business landscapes. Digital payment is gaining different heights, as paper money has been exchange for a standard and seamless shopping experience. With just a simple text to exchange payment, the users are achieving unparalleled convenience for payment options.
Cashless payments gained new heights during the pandemic that hit rapidly the world. The safety and cleanliness concerns led to the steady growth of contactless payment methods. All types of businesses gain benefits by switching to contactless payments if they meet consumer demands by providing them safe, fast and easy transactions.
Following are some of the statistics that have recently shot up in popularity,
- According to a Mastercard poll, more than 79% of global consumers are using some form of contactless payment.
- Text-based and mobile payments are growing from $10.3 billion in 2020 to a whopping $18 billion by 2025.
In this article, we will gain deep detail about contactless payments and how much it cost to add a contactless payment option to a start-up.
What are contactless payments?
Contactless payments are such payments that don’t require any contact between a consumer and a vendor, sometimes it even doesn’t require the consumer in a particular place; for example, online purchases.
There are four main types of contactless payments:
NFC- Near Field Communication
NFC is a technology that allows consumers to transmit payment during the point of sales (POS) by providing their credit or debit card as a payment option.
Wallets such as Apple Pay, Google Pay and Samsung Pay are available on smartphones and certain bank apps allow the consumer to transact the payment by POS terminal by use of NFC technology.
Any purchases made within the app such as food delivery apps like Zomato or Swiggy don’t require any physical contact and payment takes place within the app.
The payments made through some websites or digital platforms have replaced physical payment flow and are contactless in nature. Digital Wallets Solution providers help in developing wallets that are cloud-enable, secure, authenticated and encrypt.
What are the Top Digital payment trends?
Digital payments surged at heights never to decline due to years followed by a pandemic, which taught people to keep their safety and trust the other person by paying other than paper money. The payment ecosystem is getting mature day by day as new competencies are test and refined daily.
Following are some of the top digital trends
Artificial Intelligence and Machine Learning
The transformation and advancement of technology have also increased the insecurity of threats and hence banks and financial institutions have started using ML. More than 85% of people prefer AI-based platforms to reduce fraud events in payments. Therefore, AI and ML carry trend-based perceptions that scale up as per requirement. AI has taken leaps of enhancement in innovating itself in the technology world such as accepting voice-activated payments.
Blockchain carries enormous value in transferring international payments. This technology is interoperable, accessible and efficient to use. The time taken during this payment is comparatively less and gives an ideal solution. However, digital currencies like cryptocurrencies are gaining popularity with optimistic investors. According to reports by the Atlantic Council, a Central Bank Digital Currency (CBDC) has already been develop by 9 countries while 30 countries are in queue for one.
Biometric verification has innovated itself from mere fingerprint to heartbeat analysis. Government or private firms are use to biometric technology. Whether it’s passport authentication or employees’ daily report, biometric authentication records everything in just a second by AI. It’s a highly protect technology which builds consumer loyalty. Biometric verification is consider a great way to ensure consistency and safety for online users.
BNPL- Buy now, Pay Later
BNPL has led to an ease of life for buyers. The Buy now, and Pay later have usually given relief to the middle class or service class public. As they have a limited set of budgets to buy things. Consumers can now buy anything easily with interest-free instalments which has increased the purchase of machinery or gadgets. This non-ending trend is going to increase, by giving more advantages to debt-adverse India.
The actual card detail is replace by an alternate code known as “Token”. A whole individual detail will be available to the merchant within seconds which will reduce the scope of misuse or fraud. It is safer and more secure. Multiple tokenisations is requir for multiple cards.
From a simple desktop to a laptop and Laptop to a small smart gadget. No, the list is still continuing, mini smartphones or wearable devices such as smartwatches are a trendsetter which has integrated the technology of payment methods. It doesn’t require the smartphone to be unlock and tappe for payment, as wearable technology includes error-free payments.
Cost of contactless payments solutions
Customers require the widest range of payment options if they are running any sort of business. The more the choice of payment you offer to consumers. Such as mobile payments, debit cards and bank transfers; the more the consumers will shop from your firm. Local business stores will get more consumers to pay quickly and securely by using contactless methods.
Following are some factors that are include in the cost of building own contactless payment method
Machine cost of contactless payment
A minimum monthly service charge (MMSC) is required to be paid by the business while getting a contactless payment machine into usage. The business has to decide which merchant service to work with; while some of the service providers don’t even charge an MMSC.
The figure that is charge varies from $10 to $30. Businesses can calculate the charges upon the monthly transactions it has made via contactless payments. Whatever the transaction amount would be as little as $7; the business is eligible to pay as per the contract of MMSC $10 to $30.
The approval fees are calculat with every purchase, in order to cover the cost of processing the payments. This process involves checking the card, for example. If is it lost or stolen; or does it have sufficient funds in the account for the price. Even if the payment fails, the fees will still be generally between 1 and 5p; no matter what was the actual amount of the transaction.
The transaction fees are usually charge on payments made by debit cards and a certain percentage amount is charge as the cost of the transaction. The transaction fees vary from 0.5 to 0.75% which includes transaction value fees and authorisation fees.
The daily payments made by the vendor’s machine have been report to monitor and even forecast the firm’s sales patterns. Some service-providing merchants charge differently for this while some set the charges beneath the standard contract.
Contactless payment solutions for your start-up
Contactless payment solution allows customers to wave their chip-imbibed device or cards that are even include in their smartphones during the POS- Point of Sale for making a purchase. The result of contactless payment is the same as a traditional swipe with added benefits of improvised transaction speed and security. Customize contactless payment solutions which are suitable for your start-up are made by a team of experts that is just ready to use.
The world is driving rapidly towards the adaptation of contactless payments by growing its collaboration with banks, fintech and government regulators. Contactless payments have been a critical tool in modern retailer collection. The start-ups can take advantage by boosting their profitability by serving customers along with the streamlined experience they wish.